Hong Kong shares ended flat Tuesday as early gains were pared by profit-taking, while investors are also concerned about the state of the Chinese economy. The Hang Seng Index edged down 3.07 points to 24,749.02 on turnover of HK$70.56 billion ($9.10 billion). With Wall Street closed for the Labour Day holiday, investors were given a weak lead from Europe where concerns about the effects of the growing crisis in Ukraine and another weak batch of economic data stunted buying sentiment.
The Hong Kong market remains nervous after two indexes of Chinese manufacturing showed a slowdown in activity in August. Despite hopes that the disappointing results could spur fresh growth-boosting measures from Beijing, traders worry this may not be enough. "The risk of an imminent hard landing appears small and although policymakers have so far stopped short of the kind of stimulus likely to drive another rebound, we do expect them to continue to fine tune policy in order to prevent a sharp drop off in growth," Capital Economics said, according to Dow Jones Newswires.
CNOOC shed 1.15 percent to HK$15.46, Henderson Land Development lost 0.29 percent to HK$51.80 and HSBC eased 0.48 percent to HK$83.20. China Mobile rose 1.82 percent to HK$97.7, Internet firm Tencent shed 0.63 percent to HK$125.8 and CCB bank lost 0.53 percent to HK$5.68. However, in China the benchmark Shanghai Composite Index jumped 1.37 percent, or 30.54 points, to 2,266.05 - its highest since June last year - on turnover of 170.9 billion yuan ($27.8 billion). The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.34 percent, or 16.50 points, to 1,249.06 on turnover of 192.0 billion yuan.
While there are hopes for a more accommodative monetary policy, analysts also expect the Shanghai market to get a boost from a tie-up with Hong Kong that will allow investors in each exchange to trade in the other. The programme is likely be launched in early October, state media has said. "Speculators bought defence (industry) and cyclical stocks in anticipation of the upcoming Shanghai-Hong Kong connect programme," BOC International analyst Shen Jun told AFP.
Shanghai-listed Beijing Aerospace Changfeng soared by its 10 percent daily limit to 21.79 yuan while Aerospace Communications Holding also jumped 10 percent to 16.74 yuan. Port operators rose after state media said China will likely issue guidelines to promote development of the maritime transport sector. Zhuhai Port surged 10 percent to 5.35 yuan in Shenzhen, while Tangshan Port advanced 10 percent to 5.69 yuan in Shanghai.
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