Hong Kong shares fell 0.65 percent in thin trade on Thursday amid ongoing concerns over the eurozone debt crisis and ahead of a crucial auction of Italian 10-year debt later in the day. The benchmark Hang Seng Index slipped 120.75 points to 18,397.92 on turnover of HK$29.01 billion ($3.69 billion). Dealers stuck to the sidelines as they await the long-term sale of Italian bonds, which is seen as an important test of confidence in the health of the country's bond market.
"The focus will be on the performance of European sovereign debts as we enter into 2012," said Alvin Cheung, associate director of Prudential Brokerage Ltd. "Concerns are that ratings agencies may downgrade some of these debts early next year, and that the eurozone countries may not be able to repay investors when the debts mature," he told Dow Jones Newswires.
In Hong Kong, mainland developer China Overseas Land dived 4.9 percent to HK$13.12 while peer China Resources Land dropped 3.6 percent to HK$12.38. Ports operator Cosco Pacific shed 2.2 percent to HK$8.98 while clothing chain Esprit Holdings, whose key markets are in Europe, fell 1.8 percent to HK$10.02.
Chinese shares closed 0.16 percent higher. The Shanghai Composite Index, which covers both A and B shares, gained 3.55 points to 2,173.56 on turnover of 36.0 billion yuan ($5.7 billion). Sentiment was boosted by an editorial in the official China Securities Journal that said Beijing may cut the amount of money banks must hold in reserve after the New Year holiday.
Railway-related stocks gained despite a critical report Wednesday on a fatal high-speed rail crash in July, with investors tipping companies to benefit from expected government improvement moves. Construction firm China Railway Erju rose 2.9 percent to 4.91 yuan and bullet train maker China CNR added 1.2 percent to 4.23 yuan. Car makers also rose on bargain-hunting. SAIC Motor jumped 4.1 percent to 13.88 yuan, while FAW Car gained 7.9 percent to 8.45 yuan.
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