Hong Kong share prices closed 1.74 percent lower on Monday, as profit-taking in financial firms finally ended a seven-session upward surge, dealers said. The benchmark Hang Seng Index closed down 301.92 points at 17,087.95, off an intraday low of 17,032.44.
Turnover was high at 92.13 billion Hong Kong dollars (11.81 billion US). Dealers said they expected the blue chip index to continue to consolidate in the near term after the market's 19.5 percent advance in the previous seven sessions. "If the index falls below the 17,000 resistance level Tuesday, I expect it will trigger heavy selling pressure in the near term," said Castor Pang, a strategist at Sun Hung Kai Financial, according to Dow Jones Newswires.
He said the next technical support level would be 15,800. But Steven Leung, director at UOB KayHian, said the strong turnover would help prop up the market. "Abundant liquidity will provide strong underlying support to the local bourse, and I expect the index to remain in the range of 17,000 to 18,000 points in the near term," he said. Financial companies led Monday's falls on profit-taking. China Construction Bank dropped 6.7 percent to 4.90 dollars.
The lender had gained 10.5 percent in the previous two sessions. Bank of Communications dropped 0.4 percent to 6.96 dollars after jumping 4.6 percent in the previous three sessions. Industrial & Commercial Bank of China slid 1.9 percent to 4.71 after gaining 4.6 percent in the previous three sessions.
Weakness on China's markets also weighed on the local bourse. The Shanghai Composite Index ended down 1.8 percent at 2,579.75 on profit-taking in mainly small- and medium-sized companies. Bucking the downtrend, China Citic Bank rose 3.7 percent to 4.16 dollars after it agreed to buy a 70.32 percent stake in Citic International Financial Holdings from its parent, Citic Group, for 13.56 billion dollars as part of its plans for foreign expansion.
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