Hong Kong stocks fell on Thursday, tracking a softer tone in regional markets as investors locked in short-term profits on fears of rate hikes in the US. Brokers said investors were taking the rate hike fear as an excuse to sell down blue chips but demand for Chinese laggards slowed the slide.
Blue chip index constituents China Life rose 2.5 percent, Bank of China gained 1.02 percent and China Construction Bank finished 0.86 percent ahead, bucking a 0.34 percent fall in the Hang Seng Index. The benchmark Hang Seng Index lost 69.22 points to close at 20,380.21. The China Enterprises index of mainland H shares gained 0.13 percent to end at 10,163.30.
"Investors looking for laggards among Chinese financial stocks slowed the slide of the blue chip index. Without the Chinese constituents, the index would have fallen much deeper," said Conita Hung, head of research of Delta Asia Financial.
"Ample market liquidity encouraged investors to look for bargains among Chinese enterprise stocks," Hung added. H share PICC rose 2.2 percent. Ping An Insurance (Group) Co, which reported an 85 percent leap in 2006 earnings on Wednesday, rose 6.1 percent. Turnover was nearly HK$60 billion (US $7.7 billion), flat from Wednesday's HK$59.07 billion. "The sentiment is seen mixed with some players expecting a correction following the recent strength of the Chinese stocks," Hung said.
China energy plays slid on profit taking, with PetroChina losing 0.71 percent and Sinopec Corp falling 2.02 percent. The losses come a day after a five-year energy strategy note said China would soon require oil firms to keep minimum levels of crude stocks and reiterated a call to speed up building government strategic oil tanks.
China Resources Enterprise Ltd the country's top brewer - which is currently completing its transformation from conglomerate to consumer play - shed 2.1 percent a day after CLSA downgraded the stock from buy to outperform, saying it was no longer cheap. China's biggest cement maker Anhui Conch Cement Co Ltd dropped 7.9 percent ahead of its earnings announcement expected later in the day. The firm's stock has risen roughly three-fold over the past 12 months.
Another loser was machine manufacturer China Infrastructure Machinery Holdings Ltd, which fell 5.4 percent after it said it would issue US $287 million worth of convertible bonds, raising capital to fund expansion of production capacity. The bonds are convertible into 109.7 million shares at HK$20.45 each, the company said.
Bucking the downward trend, container vessel operator China Shipping Container Lines Co Ltd soared 12.4 percent. The company said it planned to spend 4.1 billion yuan in the next three years to buy vessels and boost capacity after earnings last year plunged 76 per cent due to falling freight rates, according to the South China Morning Post.
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