Hong Kong shares drop; Chinese up

Hong Kong shares fell for a third-straight session on Thursday, with cyclicals and small cap stock losing the most, ahead of US payrolls data on Friday, while cement shares led the China benchmark higher. The territory's heavy weights such as Hutchison Whampoa , which saw good buying interest ahead of first-half earnings announcements after markets closed on Thursday, could not beat the broad market pessimism on account of global worries and ended lower.
"Good earnings will serve as a good base, but it probably won't be the catalyst for any reversal with fundamental macro economic concerns overhanging like this right now," said Larry Jiang, chief investment strategist at Guotai Junan Securities. Hutchison has gained 10 percent over the last three weeks, but could come under pressure on Friday after its earnings lagged forecasts.
The Hang Seng index quickly gave up early gains and ended down 0.5 percent at 21,884.7 points, with Chinese oil giants, CNOOC Ltd, PetroChina Co Ltd and China Petroleum & Chemical Corp among the hardest hit even as oil prices fell to the lowest in a month on Wednesday.
All three stocks sank into technically oversold territory, with CNOOC the top drag on the Hang Seng Index, reaching a six-month low with its 2.4 percent decline on Wednesday. Cement producer China National Building Material Co Ltd (CNBM) was one of the exceptions, gaining more than 3 percent after forecasting first-half net profit would more than triple from a year ago.
Bearish bets in CNBM had picked up significantly over the past week, hitting 32 percent of total turnover on Wednesday. Among the small caps that were hammered on Thursday were shampoo-maker Bawang International (Group) Holding Ltd which plunged by more than 8 percent, and Tianneng Power, which lost more than 13 percent. The Shanghai Composite Index snapped a two-day losing streak, edging up 0.21 percent to 2,684.04 even as A-share turnover declined for a second-straight day, almost 30 percent below its 20-day average.
Cement names were among the biggest supports to the Shanghai benchmark, extending gains after the Ministry of Industry and Information Technology (MIIT) said on Tuesday that industry profit surged 170 percent in cement. Anhui Conch Cement was among the top supports to the benchmark, gaining 2.6 percent. Huaxin Cement gained 6.3 percent. Gains over the last two sessions have lifted Anhui Conch out of oversold status on the charts. Gains were cut by lingering fears that a fresh high in inflation data for July, expected to be released next week, could precede another rate hike in China have hobbled any hopes of an earnings-driven rebound in the market.