Hong Kong shares sink to lowest since December four, China in worst day in two weeks

Hong Kong shares tumbled on Monday to their lowest close in more than three months, while onshore Chinese markets suffered their worst loss in two weeks, hit by concerns ranging from the euro zone to China's property and financial sectors. Chinese hypermart operator Sun-Art Retail fell 3 percent, while food and beverage giant Tingyi Holdings skidded 3.8 percent after their 2012 corporate earnings results were below expectations.
The CSI300 of the leading Shanghai and Shenzhen A-share listings shed 1.5 percent and the Shanghai Composite Index closed down 1.7 percent at its lowest since December 28 in volume 20 percent below its average over the past 20 days. The Hang Seng Index ended down 2 percent at 22,082.4, its lowest close since December 4. Losses on the day opened up a 309-point gap from Friday's low and Monday's high, which will be hard to scale.
The China Enterprises Index of the top Chinese listings in Hong Kong slid 2.1 percent, underperforming mainland markets. Turnover in the territory tumbled 24 percent from Friday's one-month high. "The selling pressure is not over yet," said Jackson Wong, Tanrich Securities' vice-president for equity sales. "There just weren't any positive catalysts at all on the day."
Investors will be looking at Thursday's announcement of the HSBC flash PMI, a private preliminary survey of manufacturing activity in March in China, to see if the economic recovery in the world's second-largest economy is sputtering. The flash PMI number "will need to top estimates to change anything," Wong said.
On Monday, there was a broad sell-off hitting the financial and growth-sensitive sectors, with investors rattled by a radical bailout plan for Cyprus. Global supply chain giant Li & Fung dived 3.4 percent. Chinese financials were broadly weaker after the official China Securities Journal reported that Bank of China Ltd Chairman Xiao Gang was named head of the China Securities Regulatory Commission at a Sunday meeting of the agency. Citic Securities skidded 3.7 percent in Hong Kong and 2.1 percent in Shanghai after the report sparked worries that the departure of current commission chairman Guo Shuqing could slow reforms in the sector.
Comments from Li Keqiang at his first press conference on Sunday as China's premier touting the anti-corruption focus of the new government also hurt luxury-related sectors such as premium alcohol, Macau casinos and high-end retailers. Kweichow Moutai tumbled 4.3 percent to its lowest since May 2011 in Shanghai, breaking below a key chart support at 170.9 yuan set in January 2012. Sands China shed 3.9 percent while Prada was down 4.7 percent.
Shares of some larger property developers rose, while those of smaller rivals fell as investors bet on the ability of larger developers to survive any additional curbs on the housing market. Official data showed new home prices in China rose in February from a year ago for a second consecutive month. However, further gains are expected to be contained by tougher tax plans the government unveiled this month to curb real estate speculation. In Hong Kong, China Resources Land bounced up 2.2 percent after testing four-months lows earlier in the day, but Evergrande fell 2.4 percent. China Vanke climbed 2 percent in Shenzhen.