Hong Kong, China shares slump

Hong Kong and China shares tumbled on Thursday as investors sold off mainland property and banking names, with the Hang Seng Index hitting its lowest point since July 2009. On a day when economic gloom spawned a rout in Asian equities and Hong Kong had its highest turnover in three weeks, the Hang Seng Index closed down 4.9 percent at 17,912.0 points, while the China Enterprises Index lost 6.3 percent at 9,202.7 points.
Industrial and Commercial Bank of China (ICBC) dived nearly 8 percent to lead losses among mainland banks. Losses among mainland property companies were led by Greentown China Holdings Ltd, which ended down 16.2 percent in more than three times its 30-day average volume.
Property names extended steep losses after Reuters reported that China's banking regulator had ordered trust companies to report on their exposure to the parent and units of Greentown. "That's a huge item...I had a lot of people ask me about that," said Hong Hao, a global strategist with CICC in Beijing. "In our estimate, about one quarter of the trust loans go to the property sector, so people are really concerned about their overall health."
Thursday's decline left the Hang Seng Index technically oversold and in a gap on the charts that formed between the high on July 14, 2009 at about 17,896 and the low on July 15, 2009 at about 18,030. This gap is seen offering near-term support, with the next support seen at about 17,878. This is the 50 percent retracement of the rise from the cyclical troughs in October 2008 to its peak in November 2010.
China Resources Land Ltd and China Overseas Land & Investments Ltd lost about 7 percent each, with short-selling interest staying at a high level, accounting for more than 10 percent of their turnover on Thursday. The Shanghai Composite Index closed down 2.8 percent at 2,443.1 points, its worst daily performance in over a month, as energy, banking and property counters led losses. Thursday's losses wiped out Wednesday's gains, with high A-share turnover on the Shanghai bourse second only to Wednesday's in the last three weeks.
PetroChina Co Ltd, China Shenhua Energy Co Ltd and China Petroleum & Chemical Corporation (Sinopec) were among the top five drags on the Shanghai benchmark, losing between 1.7 and 3.4 percent. ICBC and Bank of China rounded out the top five drags, losing almost 3 and 2 percent respectively.