Hong Kong shares fell on Friday, dragged down by Chinese property stocks after Beijing extended home purchase restrictions to cool surging property prices, with the Hang Seng Index posting its biggest weekly decline since March. On top of the worsening eurozone debt crisis, market players have been spooked by warnings from Moody's and Standard & Poor's this week that it could cut the United States' prized triple-A rating by one or more notches this month if a deal on raising the government's debt ceiling is not reached soon.
The Hang Seng Index finished down 0.3 percent on the day at 21,875.38 points as turnover remained under its 20-day moving average and declined slightly from Thursday. The index fell 3.8 percent on the week. The highest turnover on the Hang Seng this week coincided with the worst one-day drop in fourteen months on Tuesday, while turnover declined as the market rebounded mildly on Wednesday. This possibly indicates investors were more willing to sell in a weakening market than to buy in a rising one.
Chinese Overseas Land & Investment Ltd and Chinese Resources Land Ltd were the top two losers among benchmark constituents on Friday after Beijing on Thursday extended home purchase restrictions to more cities in its latest move to curb housing inflation.
Chinese Overseas Land fell nearly 5 percent, while China Resources Land shed nearly 3 percent. Longfor finished down 1.5 percent on the day, while Evergrande reversed a more than 3 percent loss at midday to finish up 2.8 percent.
In Shanghai, surging construction-related names helped the Shanghai Composite Index reverse early losses to close up 0.4 percent on the day and up 0.8 percent on the week at 2,820.2 points. Shanghai's fourth-straight weekly gain came as A-share turnover hit its highest this week on Friday, almost 18 percent more than its 20-day average. China Vanke, the country's largest developer by sales, slumped 1.8 percent, while Poly Real Estate Group dropped 2.8 percent.
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