Hong Kong stocks lower but Bank of East Asia rises

Hong Kong's top shares drifted lower on Tuesday after sharp gains in the past two sessions, but banks rose as Bank of East Asia's results impressed investors and set a promising precedent for the earnings season.
The blue chip Hang Seng Index ended down 0.45 percent, or 61.02 points, at 13,515.66, pulling back after gaining four percent since on Friday.
Bank of East Asia Ltd rose 1.4 percent to HK $25.40, reversing losses after the bank said during the mid-session break that its net profit in the second half of 2003 more than doubled, beating forecasts.
"A 50 point decline is nothing much after the past two day rally," said Dale Tsang, managing director of securities trading at GC Capital Asia Ltd.
"It (Bank of East Asia) is a good start to the earnings season, I think the market could go as high as 14,300 in the next month or so," he added.
But concerns that the spread of bird flu in China and other parts of Asia may prompt overseas funds to pull out of the region lurked at the back of some investors' minds, traders said.
"Sooner or later bird flu is going to cross the border. I think the recent rally was technical and we are due for another consolidation," said Andrew to, sales director at Tai Fook Securities.
Hong Kong has so far remained free of avian flu. Turnover totalled HK $21 billion (US $2.70 billion) in line with the 20-day average.
The Hang Seng has now gained 7.5 percent in 2004.
China plays also lost some of their lustre after jumping nearly five percent on Monday as punters bet that a revaluation of the yuan was imminent, but China reiterated a denial on Tuesday.
The H-share index of Mainland Chinese stocks listed here fell 2.95 percent to 4,854.71 points.
Asia's largest refiner Sinopec Corp led the declines, falling 5.93 percent to HK $3.175. After the market close, oil major said it would sell its 2.1 percent equity stake in Sinopec via a placing.
Taking heart from Bank of East Asia's results, BOC Hong Kong Holdings Ltd, the Hong Kong arm of the Bank of China, rose 0.67 percent to HK $15.
Global lender HSBC Holdings Ltd, which makes up a third of the index's market capitalisation, was flat at HK $124.
Television Broadcasts Ltd was the top blue chip loser, slipping 3.15 percent to HK $36.90 after ING Financial Markets and Merrill Lynch cut 2003 earnings estimates by 20 percent and 12 percent respectively.