HONG KONG: Hong Kong shares declined on Monday, with financials and growth-sensitive sectors weak after Beijing gave its lowest annual GDP growth target in eight years, and sentiment was also hit by expectations of more fundraising.
The Hang Seng Index closed down 1.38 percent at 21,265.31. The China Enterprises Index of the top mainland listings in Hong Kong ended down 2.28 percent at 11,470.7.
The Shanghai Composite Index finished down 0.64 percent at 2,445. A-share turnover was the highest in four sessions.
HIGHLIGHTS:
Chinese financials and growth-sensitive sectors were hit after Premier Wen Jiabao cut the country's 2012 GDP growth target to 7.5 percent from the longstanding 8 percent to find leeway for promised economic and welfare reforms ahead of a leadership transition later this year.
Market watchers said investors were taking profit after GDP and inflation targets fell largely within expectations, but that it was likely to mean less aggressive monetary policy easing in China. Industrial and Commercial Bank of China Ltd fell 2.7 percent to close at the lowest since Feb. 14.
Expectations that more companies could look to take advantage of the rally this year to raise funds further weighed on the market. American International Group Inc announced a $6 billion stake sale in Asia subsidiary AIA Group Ltd at a 6 percent discount, sparking fears that any other placements could be priced at a bigger discount than AIA, Asia's third-largest insurer and seen as a better quality name.
Although trading in AIA was suspended on Monday, its insurance peers took a hit. China Life Insurance Co Ltd lost 4.4 percent and Ping An Insurance (Group) Co of China Ltd fell 3 percent.
Sun-Art Retail Group Ltd, among the largest hypermart operators in China, slumped 6.7 percent in more than three times its 30-day average volume after posting a sharp slowdown in same-store sales for the second half of 2011.
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