Hong Kong stocks slid 1 percent on Wednesday, in their steepest one-day decline in three weeks, as profit-taking weighed on recent gainers from China Mobile (Hong Kong) Ltd to Hong Kong Exchanges and Clearing Ltd.
The benchmark Hang Seng index ended at 16,310.76, just 1.3 percent off a fresh 5-1/2 year high hit on Monday. Turnover was HK$34 billion (US $4.4 billion), up 13 percent from Tuesday's HK$30 billion. The China Enterprises index of H-shares, or Hong Kong-listed shares in mainland firms, fell 1.59 percent to 6,743.82, in their largest single-day percentage loss in nearly five weeks.
Analysts were unfazed by the day's drop. "Markets don't go up in a straight line," said Tat Auyeung, portfolio manager at Apex Capital Management (Hong Kong) Ltd "We've had a fairly good rally, so this is simply profit-taking."
Others said it was normal for investors to reduce their exposure ahead of the four-day Easter break, which begins on Friday.
"As long as the market can gain support at the 16,200 level, I don't see further selling pressure," said Conita Hung, head of equity markets at Delta Asia Financial Group.
China Mobile broke its six-day winning streak to end at HK$44.05, down 3.6 percent, and Hong Kong Exchanges fell 4 percent to HK$55.75 after recently racking up hefty gains.
On a bright note, railway operator MTR Corp surged 6 percent a day after it unveiled its merger plan with Kowloon-Canton Railway Corp It had earlier tapped record highs before settling at HK$20.80.
Insurance issues led H-shares lower, as investors cashed in on recent gainers such as Ping An Insurance (Group) Co of China Ltd, which fell 5 percent to HK$21.35. China Life Insurance Co Ltd (China) slid 4.4 percent to HK$9.90.
But Chinese oil explorer CNPC (Hong Kong) Ltd jumped nearly 16 percent to HK$4.2, having earlier set 8-1/2 year highs after it said on Tuesday its 2005 profit jumped more than four-fold.
Gold miner Zijin Mining Group Co Ltd ended up 5.4 percent at HK$3.675 after issuing shareholders 10 shares for every 10 owned in its bonus distribution plan. Deutsche Bank revised Zijin's target price to HK$4.06 in line with the issue.
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