Hong Kong shares drop

Hong Kong stocks consolidated on Wednesday after last week's record run, as Sinopec Corp slid further on a negative refining margin outlook while miners were hit by higher resource taxes. Hong Kong-listed China plays fell 2.2 percent, their worst one-day percentage loss in three months.
Most mainland lenders fell, as expectations ran high that China's macroeconomic data, due later in the week, could show a spike in June inflation which may herald fresh policy tightening, including an increase in interest rates. Brokers said the market would likely consolidate between 22,800 and 23,200 points before the release of China's economic data this week.
"You had a fairly good run, so external factors are now triggering some profit-taking," said Tat Auyeung, fund manager at APEX Capital Management. "Overall, the market uptrend is still intact. Whatever reasons you had for buying, they're still there."
Losses deepened in the afternoon, with many blaming European selling. The benchmark Hang Seng Index closed down 215.38 points at 22,841.92 on mainboard turnover of HK$84.1 billion (US $10.8 billion) compared with Tuesday's HK$78 billion.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, fell 283.18 points to 12,798.70. Top Asian oil refiner Sinopec dropped 3.8 percent to HK$8.35 as investors worried that high crude prices would pressure the company's refining margins.
PetroChina Co Ltd, which also has a refining arm, slumped 3.1 percent to HK$11.96. Offshore oil producer CNOOC Ltd declined 1.6 percent to HK$9.52. But, renewable energy play China High Speed Transmission Equipment Group Co Ltd, the country's top wind power transmission gear maker, shot up 3.8 percent to HK$15.32.
Jiangxi Copper Co Ltd sank 2 percent to HK$14.82 and Zijin Mining slid 4.4 percent to HK$4.98 after official media reported China was set to raise taxes on ores containing zinc, lead, copper and tungsten from August 1. Among mainland banks, China Construction Bank fell 2.4 percent to HK$5.70 and Bank of Communications finished 2.1 percent weaker at HK$8.81.
But Industrial & Commercial Bank of China, the day's most-traded stock, bucked the downtrend, gaining 0.4 percent to HK$4.81. Citigroup upgraded the stock to buy from hold on expectations of higher earnings and an improving outlook.
Beijing-backed mainland conglomerate CITIC Pacific extended recent losses, tumbling 3.7 percent in heavy trade to HK$39.25. After a more than month-long run up, investors started pulling out of its shares before this week's debut of Fosun International Ltd, China's top privately controlled conglomerate. Fosun ended 0.4 percent lower at HK$10.62.