Hong Kong shares fall, China stocks flat

Tumbling oil and commodity prices weighed on shares of resource companies in Hong Kong and Shanghai on Tuesday, pulling the Hang Seng index down 1.3 percent. Oil's retreat from a 32-month high, triggered in part by a Goldman Sachs report advising clients to lock in trading profits, sparked a bout of profit-taking in energy shares led by China's most valuable company, Petrochin.
Petrochina shares fell nearly 5 percent in Hong Kong, their worst single-day slump since February last year, while rival CNOOC fell 2.9 percent. Petrochina shares had run up more than 14 percent in the last month, while CNOOC had surged close to 16 percent, leaving them technically overbought and susceptible to profit taking. The oil majors were the biggest drag on the Hang Seng, which fell to 23,976.4 points, retreating further from a 2011 peak hit last Friday after three successive weeks of gains.
Energy stocks also weighed on China's main stock market, but were largely offset by strength in steel shares, leaving the Shanghai index little changed on the day. The energy sub-index in Hong Kong was the worst performerm dropping 2.7 percent on the day. Despite Tuesday's drop, the index's 9 percent rise this year is more than double that of the Hang Seng over the same period.
Air China gained 1.9 percent on the day while Cathay Pacific , last year's top performer but a major laggard this year, was flat on the day. China's main stock index ended down 0.1 percent at 3,021.4 points, with strength in steel makers countering weakness in resources, banks and property issues.
Investors also remained wary of staking out fresh positions ahead of upcoming economic data, including first quarter GDP and March inflation readings on Friday, which may give clues on how much more policy tightening can be expected. Cheng Yi, analyst at Xiangcai Securities in Shang, said "the economic data may increase worries over high inflation pressure."
The natural resouce index fell 2 percent, with the sub-index of financial shares down 0.4 percent and the property sub-index off 0.3 percent. But steel makers outperformed on expectations of stronger earnings and a rebound in steel demand as Japan begins to rebuild after a massive earthquake last month.
Two steel makers were among the top 10 biggest gainers on the Shanghai market. Nanjing Iron & Steel was the top gainer, jumping its 10 percent daily limit, while Anyang Iron & Steel rose 8.5 percent. Hebei Iron and Steel Co, the most active and biggest gainer on the Shenzhen market, rallied by its 10 percent daily limit, while Baoshan Iron & Steel Company, the third-most active share on the Shanghai market, jumped 2.9 percent. China Shipbuilding Industry was up 5.1 percent after it said it planned to raise up to 12.5 billion yuan ($1.9 billion) by selling new shares to a select group of investors.