Hong Kong shares end 0.72% lower

HONG KONG: Hong Kong shares closed 0.72 percent lower on Monday, dragged down by a poor performance on Wall Street and widespread worries about Egypt.

The benchmark Hang Seng Index dropped 169.68 points to 23,447.34 on turnover of HK$68.88 billion ($8.84 billion).

The Hong Kong market has fallen in seven out of the last eight sessions, largely due to fears of more aggressive measures by Beijing to tighten the mainland economy.

On Monday the market was also given a weak lead by Wall Street, which plummeted last week due to poor corporate earnings and instability in Egypt, where President Hosni Mubarak was clinging to power in the face of massive demonstrations.

However Hong Kong partially recovered from deep losses earlier in the day, helped by resource stocks, some of which were boosted by rising commodity prices.

Oil giant Sinopec surged 2.9 percent to HK$8.59, also helped by news of an oil and gas discovery in Sichuan province, although investors were moving out of fellow energy giant CNOOC, which fell 0.7 percent to HK$17.20.

Meanwhile Shanghai's Composite Index climbed 1.38 percent, with resource stocks gaining on rising commodity prices and water company stocks rising on upbeat earnings outlooks, dealers said.

The Shanghai Composite Index, which covers both A and B shares, was up 37.94 points at 2,790.69 on turnover of 106.8 billion yuan ($16.2 billion).

Analysts said Beijing was unlikely to make new policy announcements over the long Lunar New Year holiday from February 2 to February 8. The stock market reopens on February 9.

"The market could sustain its gains ahead of the Lunar New Year holiday as it seems that the chance of another interest rate hike is slim after recent tightening moves in the property market," Simon Wang, an analyst from Guoyuan Securities, told Dow Jones Newswires.

Water conservation firms rose after government officials reiterated at a news conference Sunday that Beijing plans $608 billion in spending on water conservation infrastructure projects over the next 10 years.

Chongqing Three Gorges Water Conservancy & Electric Power and Qianjiang Water Resources Development each rose by the 10 percent daily limit, with Chongqing Three Gorges ending at 18.18 yuan and Qianjiang closing at 18.15 yuan.

Oil and gold stocks rose sharply higher.

PetroChina gained 1.2 percent to 11.42 yuan, while Shandong Gold added 7.5 percent to 46.01 yuan.

High-speed railway equipment producers were boosted after industry leader CSR Corp issued an upbeat earnings forecast.

CSR Corp. rose 5.0 percent to 9.07 yuan after it said it expected its 2010 net profit rose more than 50 percent thanks to amid rapid growth in the high-speed railway industry.

Another railway equipment maker, China CNR Corp. gained 6.8 percent to 9.61 yuan after it said Saturday it signed 7.7 billion yuan ($1.17 billion) worth of contracts recently, accounting for 19 percent of 2009 revenue.