Hong Kong share prices closed 3.04 percent lower on Thursday, matching falls in regional markets on worries about economic data out of the United States, dealers said. The benchmark Hang Seng Index closed down 517.93 points at 16,541.69, its lowest level since May 5. Turnover was 63.65 billion Hong Kong dollars (8.16 billion US).
The slump in Asia came after a fall on Wall Street prompted by weaker-than-expected US retail sales. Property developers led declines after recent sharp gains. Dealers said economic concerns have ended the market's rally for now, and profit-taking pressure will be heavy in the near term.
They said the blue chip index will likely find initial support around 15,500-15,800 points, but advised investors to exercise caution when buying stocks at that range given the likelihood for further declines. The US Commerce Department said late Wednesday the country's retail sales fell 0.4 percent in April, contrary to economists' expectations for a 0.1 percent increase.
The surprise decline led the Dow Jones Industrial Average to fall 2.2 percent, to 8,284.89, its biggest drop since April 20. In Hong Kong, property developers were the biggest blue chip decliners as they had outperformed in the recent rally. Among these firms, Cheung Kong Holdings fell 5.1 percent to 82.00 dollars, Hang Lung Properties lost 4.2 percent to 21.80, Henderson Land dropped 3.7 percent to 36.95, and Sino Land fell 3.4 percent to 10.28.
Local banking stocks also fell sharply, with heavyweight HSBC losing 4.2 percent to 62.35 dollars and Bank of East Asia tumbling 5.6 percent to 22.05. Despite expectations for a consolidation, some analysts said the benchmark index could end the second quarter near 18,000 points.
Kingston Lin, a director at Prudential Securities, said there were no signs of liquidity exiting the market, which could mean it still has room to rise. He said short-term investors could look to invest in China property stocks on dips, as "the outlook over the sector has improved and is expected to remain positive ahead."
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