Hong Kong shares fall

Hong Kong shares reversed early gains to close 0.8 percent lower on Thursday, hurt by losses in retail-focused Li & Fung and cellphone maker Foxconn on broker downgrades as US consumption falters.
Shares in Li & Fung slid nearly 7 percent to a three-month low after Merrill Lynch downgraded the trading firm on fears that a slowdown in US consumer spending will eat into margins.
Other export-oriented companies, such as Yue Yuen Industrial, the world's largest maker of athletic footwear and apparel retailer Esprit Holdings, also fell as recent data showed a sharp decline in consumer confidence in the US and Europe.
Yue Yuen gave up 4 percent and Esprit dropped 4.1 percent. "Given their exposure to the US and European markets and the weak economic data coming out of there, investors have become very cautious and are happy to lock in any gains," said Andrew Sullivan, sales trader with Mainfirst Securities.
The Hang Seng Index closed 179.49 points lower at 22,455.67 after touching 22,885.35 earlier, while the China Enterprises Index slipped 0.8 percent. Mainboard turnover stood at HK$59.46 billion ($7.62 billion) on Thursday. On Wednesday, the morning session of trade was cancelled after typhoon signal No 8 was hoisted.
Foxconn International Holdings, one of the worst performing stock of this year, slumped a further 5.3 percent after Morgan Stanley downgraded the stock to equal-weight from overweight. Offshore oil producer CNOOC slid 1.9 as oil prices continued to retreat after US weekly data showed a surprise increase in domestic crude stocks.
Bucking the broad market trend, shares in billionaire Li Ka-shing's flagship, Hutchison Whampoa jumped 1.8 percent after brokerage CLSA upgraded the stock to buy on expectations of positive recurrent earnings in 2008 as its 3G business nears break-even. Its shares have been weighed down by five years of start-up losses in its 3G business.
Another bright spot was bourse operator Hong Kong Exchanges & Clearing, which recovered 0.9 percent after Citigroup upgraded the stock to buy from sell. The stock dropped to its lowest level this year on Wednesday after Morgan Stanley warned the exchange's dwindling turnover did not justify its lofty valuations.
Turnover on the exchange dropped to its lowest level since May 2007 at HK$48.27 billion last week, a fraction of the HK$200 billion scaled mid-October 2007. Hang Seng Bank gained 2.4 percent after hiking mortgage rates earlier this week amid higher interbank rates.
Aluminum Corp of China recovered 2.5 percent after a series of sharp losses following its profit warning last week. Titan Petrochemicals Group Ltd surged 30.5 percent after the company said it plans to cut back on its Asian oil trading business and could sell the operation soon to focus on oil storage and shipyard operations.