Hong Kong stocks fell 0.32 percent on Monday as fears that Beijing may tighten credit wiped out earlier gains after eurozone countries provided a debt lifeline for troubled Greece. The benchmark Hang Seng Index eased 70.33 points to 22,138.17. Turnover was 71.22 billion Hong Kong dollars (9.18 billion US).
The index was also hit by renewed concerns Beijing will take further tightening measures in the property sector. It gained 3.1 percent last week on hopes a yuan appreciation would help boost the earnings of overseas-listed Chinese companies. "The Greek debt crisis seems to have been solved and that was temporary good news to banks like HSBC. But Europe is still not out of the woods," Andrew To, a sales director of Tai Fook Securities, told Dow Jones Newswires.
China property companies led the fall after a report on Sunday that the banking regulator has banned commercial banks from issuing loans to speculative house buyers. It also said banks should ask for larger down payments and higher mortgage rates if they suspect purchases are speculative.
"Market talk that incentives for first-time homebuyers are being reduced, and that China is speeding up the adoption of a property tax for homeowners in some first-tier cities, is hurting sentiment," Southwest Securities analyst Zhang Gang said in China. China Overseas Land dropped 3.7 percent to 16.60 Hong Kong dollars and China Resources Land slid 4.8 percent to 16.32.
Bucking the trend, HSBC gained 0.9 percent to 82.70, tracking gains in European banks, as investors cheered news the European Union had agreed to give Greece huge loans this year at below-market interest rates if it asks for them. Russian aluminium giant Rusal gained 0.9 percent to 9.48 Hong Kong dollars after posting better-than-expected net profit for 2009.
Chinese shares closed down 0.51 percent, weighed by property developers due to lingering concerns that Beijing may introduce further tightening measures to rein in rising real estate prices, dealers said. The Shanghai Composite Index, which covers both A and B shares, was down 16.04 points at 3,129.26. China Vanke, the nation's biggest listed property developer, shed 2.0 percent to 9.20 yuan, after declining 3.9 percent in past four sessions.
Poly Real Estate Group were off 4.5 percent at 18.71 yuan, after declining 8.8 percent over same period. Banks also fell after Liu said Sunday banks were required to report on their exposure to local government loans by the end of June. Industrial and Commercial Bank of China fell 1.0 percent to 4.92 yuan, while China Construction Bank declined 1.6 percent to 5.60 yuan.
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