Markets

Hong Kong shares end 0.83 percent lower

HONG KONG : Hong Kong shares closed 0.83 percent lower on Monday as traders remained jittery over the eurozone debt cri

Published November 7, 2011 Updated November 7, 2011 11:28am

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The benchmark Hang Seng Index fell 164.90 points to 19,677.89 on turnover of HK$55.45 billion ($7.14 billion).

The market was also weighed by caution ahead of key Chinese inflation data due later this week, with investors hoping inflation will have eased after hitting a three-year high 6.5 percent in July.

South China Research said that with the European-debt situation in a stalemate, "the market is now looking upon the mainland government for policy relaxation and this may provide some buoyancy for the market in the short run."

Global markets were left disappointed by last week's G20 summit ending without new pledges of support for the eurozone, while Italy asked for supervision of its austerity programme.

News that Greece's leaders had agreed to a unity government, with Prime Minister George Papandreou stepping down, in a bid to help the debt-laden country stay afloat was unable to provide much confidence.

China Construction Bank fell 2.9 percent to HK$5.65 on a report that Bank of America is considering selling more of its stake in the Chinese lender.

CNOOC lost 2.2 percent to HK$14.92 after a US$7.06 billion deal to acquire Argentinian oil assets from BP collapsed, which analysts said would weigh on the production growth of China's biggest offshore oil producer next year.

Chinese shares closed down 0.73 percent. The Shanghai Composite Index, which covers both A and B shares, was off 18.49 points at 2,509.80 on turnover of 78.9 billion yuan ($12.7 billion). The benchmark index gained 2.4 percent over four sessions last week.

The selling Monday came after the index gained 2.4 percent over four sessions last week.

"It's natural to have some consolidation after rising too quickly," Amy Lin, an analyst at Capital Care Securities, told Dow Jones Newswires.

Property firms dragged down the market after a media report quoted Chinese Premier Wen Jiabao as saying the government would seek to bring real estate prices back down to "reasonable levels".

China has introduced a range of measures aimed at reducing prices, such as bans on buying second homes in some cities, hiking minimum down payments and introducing property taxes.

"We see property tightening has affected many companies' earnings in the third quarter and we may see more poor earnings in the fourth quarter," Zhou Xu, an analyst with Nanjing Securities, said.

Shanghai Lujiazui Finance and Trade Zone Development dropped 2.41 percent to 13.75 yuan while China Vanke, the nation's biggest listed developer, fell 2.04 percent to 7.68 yuan.

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