Hong Kong stocks fell for a fourth straight session on Friday as property stocks slid late in the day, pushing the benchmark index to its worst weekly performance since early July. Stocks came under heavy selling pressure during the week as further signs of a faltering US recovery and a moderating Chinese economy prompted investors to sell riskier assets and take profits from a recent rally.
Shanghai shares rise The Hang Seng Index ended down 0.2 percent at 21,071.57 points. It lost 2.8 percent on the week, but has clawed out a gain of nearly 4 percent for the year to date. Technically, the index was seeing support at its 200-day moving average, currently at 21,039.89, but a popular momentum indicator, the moving average convergence-divergence, was giving a bearish signal.
Local property stocks fell late in the day on fears that Hong Kong authorities might introduce measures to cool surging home prices at a news conference scheduled for after the market close. Sun Hung Kai Properties dropped 1.5 percent and Cheung Kong (Holdings) 1.4 percent.
"There is some fear that they could step up the number of land auctions or increase the supply of residential flats," said Mark To, head of research at Wing Fund Financial Group. The government later announced it would increase property supply in a bid to contain housing prices, which are already up 10 percent so far this year after gaining a third in 2009. The move could put further pressure on developers' shares next week. However, earnings-driven gains in some large-cap names helped limit the Hang Seng's losses on the day.
Hutchison Whampoa Ltd, the top performer on the Hang Seng in August, rose 2.6 percent, after billionaire Li Ka-shing raised his stake in the ports-to-telecom company. Hutchison shares have surged more than 17 percent since it released forecast-beating results late last week.
China's key stock index closed 1.2 percent higher as property shares reversed earlier losses that were triggered by a central bank statement which showed a steep drop in new mortgage loans in Shanghai. Analysts attributed the late buying to local media reports that a top real estate industry think tank had asked China's state council, or cabinet, to halt further restrictive property policies.
The Shanghai Composite Index ended at 2,606.7 points, after closing down 1.2 percent on Thursday. It fell 2 percent for the week. Shanghai's property sub-index ended up 1.6 percent, outperforming the wider index, after being in the red for most of the morning session.
"Property stocks are so volatile because the sector is a hot topic and always in focus. Some investors are very influenced by every piece of information rather that looking at the broader picture," said Wen Lijun, analyst at Nanjing Securities.
China Vanke Co Ltd, the country's top listed developer, rose 4.5 percent. Heavyweight developer Gemdale Corp rose 1.5 percent and Poly Real Estate Group Co Ltd, another major developer, gained 2.4 percent. The Shanghai branch of the People's Bank of China (PBOC) said in an emailed statement on Thursday that new mortgage loans in the city dropped to 270 million yuan ($40 million) in July from 3.08 billion yuan in June.
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