Hong Kong, China shares down

Hong Kong and China shares drifted lower in lacklustre turnover on Friday as optimism about the just-started earnings season was cancelled out by concerns over the unresolved United State debt-ceiling crisis. Debt concerns about Europe and the US, along with various concerns on the Chinese economy, have combined to rattle both Shanghai and Hong Kong markets over the past month, as spooked investors stayed on the sidelines despite attractive valuations.
But for all the volatility, Hong Kong's Hang Seng Index was flat for July, rising 0.2 percent. On Friday, it was down 0.6 percent to 22,440.3 points. For Hong Kong, near-term chart support seen at the index's June low around 21,508.
The Shanghai Composite Index declined more than 2 percent in July. It slipped 0.3 percent on Friday and 2.5 percent for the week, its worst weekly performance in four months. Some big companies will report earnings next week, and some see this as the best chance for pushing for getting gains from China plays..
In Hong Kong on Friday, Hang Lung Properties hit a one month low after a profit dip, while AIA Group shares were standout leaders on the day,jumping 3.4 percent on heavy volume in an otherwise choppy trading day. The insurance giant, which focuses on Asia's more developed markets, reported another strong set of quarterly numbers on robust growth in China and Thailand. Investors have rushed in to load up on AIA shares each time there was evidence its business in Asia was growing, supporting the case for above-average valuations relative to its global peers.
AIA trades at 18.3 times next year's earnings forecasts, according to Thomson Reuters Starmine. Canada's Manulife trades at 10 times next year's earnings while British insurer Prudential plc, which failed in its bid to buy AIA last year, trades at 11.6 times.
China's worst railway accident since 2008 last Saturday, fresh lending curbs to property developers and lingering US debt concerns combined to pummel stock markets on the mainland this week. The Shanghai Composite ended the week at 2,701.7 points. Friday's turnover was 83.5 billion yuan, almost 24 percent below its 20-day average.
Benchmark heavyweights PetroChina Co Ltd, China Shenhua Energy Co Ltd and Aluminium Corp of China (Chalco) were its top drags. The Shanghai energy sector index was a significant underperformer, declining 1.6 percent on Friday. It was off 1.9 percent for the week.