Hong Kong stocks ended lower on Wednesday, weighed down by ratings adjustments on banking powerhouse HSBC, although gains in ports-to-telecom conglomerate Hutchison Whampoa helped trim losses.
"The market was quite strong except for HSBC," said Francis Lun, general manager at Fulbright Securities.
The blue chip Hang Seng Index ended 0.57 percent, or 75.77 points lower, at 13,320.88.
Turnover continued to be above recent averages with HK $22.95 billion (US $2.94 billion) changing hands, though it was lower than Wednesday when turnover hit a five-year high due to a large placement of PetroChina shares.
HSBC shares, which account for a third of the Hang Seng index weighting, fell 1.59 percent to HK $124, following a 1.21 percent decline in the group's London shares on Tuesday.
Several investment houses downgraded ratings on HSBC on Tuesday, though two banks upgraded their view on the bank.
Hutchison Whampoa Ltd, controlled by Asia tycoon Li Ka-shing, gained 2.37 percent to HK $64.75 on reports that the long-awaited launch of its 3G service in Hong Kong would come as early as next week.
Hutchison shares have also under-performed the market in the past year, rising 21 percent, versus a 35 percent gain for the Hang Seng Index, making them a laggard buy.
China shares put in a mixed performance.
The H-share index of China registered companies listed in Hong Kong ended 0.61 percent lower at 4,781.92.
Chinese oil producer PetroChina moved higher after slipping on Tuesday following a large share placement of its shares by global oil giant BP. PetroChina shares rose 1.91 percent to HK $4.40 as investors bet on high oil prices in the year ahead.
But Asia's largest oil refiner Sinopec Corp continued to fall as investors worry the group may be next on the selling list for strategic shareholders.
The group's shares fell 4.69 percent to HK $3.05.
Despite bouts of profit taking in the past few weeks, money managers expect investors will continue buying Hong Kong-listed mainland shares on a rotational basis.
"China valuations are shooting through the roof. But looking at a lot of companies on a valuation basis compared to their global competitors, they still look quite attractive," said Aaron Pong, senior portfolio manager at RBC Asset Management.
Shares in Chinese steel maker Angang New Steel Co surged following China's decision to slap stiff tariffs on cold rolled steel imports.
The group derives the bulk of its sales from cold rolled steel sheets for big tickets items and its stock jumped 8.33 percent to HK $4.225.
On the downside, property firm Kowloon Development Co Ltd shed 7.89 percent to HK $7 after it said it plans to issue HK $83 million new shares at HK $6.85.
Hong Kong's main carrier, Cathay Pacific Airways Ltd, dropped 1.36 percent to HK $14.55 despite an earnings upgrade by investment bank J.P. Morgan and better than expected traffic data.
China's largest airline, China Southern Airlines Co Ltd, fell 1.4 percent to HK $3.525.
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