Hong Kong stocks sag

Hong Kong stocks fell 0.4 percent on Tuesday with property shares weighed down by interest rate worries although offshore oil producer CNOOC jumped after a brokerage upgrade. The Hang Seng Properties sub index fell 1.43 percent to 19,036 as investors awaited the outcome of a US Federal Reserve meeting on interest rates due later in the day, with most analysts anticipating a 25 basis points rate hike.
"I'm sure they will raise interest rates. But more important is the question of whether they indicate in their statement whether there will be further increases," said Francis Lun, general manager at Fulbright Securities.
Henderson Land Development Co Ltd was among the top losers, down 2.9 percent at HK$39.80. The city's largest property firm Sun Hung Kai Properties Ltd fell 1.1 percent to HK$80.15. Hong Kong banks usually move in tandem with US rates due to the local currency's peg to the greenback.
The blue chip Hang Seng Index fell 0.4 percent, or 61.10 points, to 15,047.84.
Volume was below recent averages with HK$20.7 billion (US$2.65 billion). Traders said further rate hikes could hit sentiment but strong economic fundamentals were likely to push the market higher in coming weeks.
"I think we are going to see property and banking stocks do well as rates near their peak. We will probably see new highs for the Hang Seng this year," said Joseph Lau, director at Tai Fook Asset Management.
Robust corporate earnings are also seen boosting market sentiment.
Blue chip firms China Mobile (Hong Kong) Ltd and Lenovo Group Ltd are due to report earnings on Wednesday with Swire Pacific Ltd and Li & Fung Ltd due to report later in the week.
London-headquartered but Asia-focused bank Standard Chartered was among the top performers of the day after the firm posted a better than expected 20 percent rise in first half profit and said it was well placed for continued strong revenue growth.
Standard Chartered rose 5.9 percent to HK$171.50. Mid-tier property developer Hysan Development Co Ltd rose 1.08 percent to HK$18.75 after the firm reported a forecast beating 20 percent rise in underlying net profit of around HK$320 million thanks to soaring Hong Kong rents.
China's top offshore oil producer, CNOOC Ltd, rose 2.7 percent to HK$5.65 after J.P. Morgan raised its rating on the firm to "overweight" from "neutral", saying its valuation was attractive.
China's largest copper producer Jiangxi Copper Co Ltd fell 2.9 percent to HK$4.17 ahead of its earnings due later in the day. Traders said the market was expecting a strong set of earnings, with a large institutional investor taking profit on the shares after a recent rally.