Hong Kong stocks fell nearly 1 percent to their lowest level in two weeks on Thursday with declines seen across the board as oil prices hit a fresh record high. The benchmark Hang Seng index lost 0.84 percent, or 119.12 points, to 14,030.81 - its lowest close since June 21 - on brisk turnover of HK$21.6 billion ($2.8 billion), up from Wednesday's HK$17.6 billion.
US crude oil traded to a peak of $61.86 a barrel as the year's first hurricane threatened already reduced US Gulf production, stoking fears that higher energy prices will cut into corporate profits and reduce consumers' discretionary spending.
Peter Lai, a director at DBS Vickers, said profit taking on early gains had unsettled a market that was initially supported by speculation that Hutchison Whampoa would sell its stake in Canadian oil firm Husky Energy Inc on the record high oil prices.
"But in the afternoon some of the funds began to take profits," Lai said. Merrill Lynch analysts said in a report that although Hutchison may not necessarily need the extra funds, they expect the valuation of Husky is looking more attractive to the firm now.
Of the two stocks that rose in the 33-stock Hang Seng index, Hutchison Whampoa gained 0.21 percent to HK$70.25.
After reaching a new high of HK$5.05, China's top offshore oil producer CNOOC Ltd settled down 0.51 percent at HK$4.90, while PetroChina Co Ltd shed 0.82 percent to HK$6.05 after hitting a peak of HK$6.25.
Elsewhere, retail-related firms such as cosmetic retailer Sa Sa International Holdings Ltd advanced ahead of May retail sales data. Sa Sa, popular with mainland China tourists, put on 1.32 percent to HK$3.825.
After the market closed, official data showed Hong Kong retail sales grew 7.2 percent in the 12 months through May, missing forecasts and suggesting tourists were not spending as much as last year.
Among the biggest decliners, China Southern Airlines plunged 10.75 percent to HK$2.075 after industry sources said its parent firm had lost $133 million due to the failure of a Chinese securities firm, making it one of the highest-profile corporate victims of the mainland brokerage sector's woes.
Financial problems were discovered during the latest audit of accounts at the parent firm, China Southern Air Holding Co, sources said.
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