Hong Kong share prices closed 0.65 percent lower on Tuesday, following profit-taking in Chinese financial and insurance stocks, dealers said. The benchmark Hang Seng Index ended down 117.14 points at 17,862.27, after trading between 17,821.71 and 18,159.99 during the session. Turnover was 50.66 billion Hong Kong dollars (6.49 billion US).
Analysts said the index is likely to consolidate further in the near term, after gaining 24 percent since the start of this year, boosted by the effects of government stimulus measures in China and the US. "The index is likely to face more pressure amid uncertainties over the global economic recovery," Peter Lai, a director at DBS Vickers, told Dow Jones Newswires. The index may test below 16,000 points in the third quarter, Lai said.
"It would be a wiser strategy to sell stocks to lock in profits, as the outlook for the equities market is unlikely to be promising in the third quarter," he added. Y.K. Chan, a strategist at Phillip Capital Management, told Dow Jones that the upside for the market is limited as there is a lack of positive news to boost sentiment.
"Whether the market can move further upward depends on the first-half corporate earnings reports out from later this month," he said. Profit-taking in China Construction Bank led the blue chip decline. The Chinese bank fell 1.2 percent to 5.73 dollars after rising 21 percent since May 27, contributing 18.37 points to Tuesday's fall.
Ping An Insurance dropped 3.3 percent to 55.70 dollars after a 9.8 percent gain in the previous three sessions. Oil companies fell on softening crude oil prices. PetroChina fell 2.0 percent to 8.17 dollars and CNOOC was 1.5 percent lower at 9.03 dollars. Airline operator Cathay Pacific bucked the trend and was the best-performing blue chip, rising 6.2 percent to 10.90 dollars on falling oil prices.
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