Hong Kong stocks fell on Friday as investors digested a thick pile of blue chip earnings reports and sought safe utility stocks ahead of politically charged elections in Taiwan over the weekend.
News that Taiwan President Chen Shui-bian was shot but not critically injured while campaigning had little lasting impact on the market with traders saying investors were more concerned about the election outcome.
The blue chip Hang Seng Index closed ended down 0.20 percent, or 25.61 points, at 12,790.58. The Hang Seng lost 1.1 percent over the week and has now surrendered nearly all the gains made so far this year.
Volume was slightly below recent averages with HK $16.29 billion (US $2.08 billion) traded.
Utility shares were among the top performers as investors eyed elections in Taiwan due to take place over the weekend.
The island is also holding a referendum on Saturday that has enraged arch-foe China by raising the prospect of a step toward formal independence from the mainland. China sees Taiwan as a breakaway province to be recovered by force if necessary.
Shares in number three utility Hong Kong and China Gas Co Ltd rose 2.69 percent to HK $13.35. Hongkong Electric Holdings Ltd, a previous market laggard, rose 2.43 percent to HK $33.70.
Investors turned bearish on blue chips after digesting a thick pile of earnings reports over the week.
Shares in Hutchison Whampoa Ltd, the sprawling conglomerate backed by Asia tycoon Li Ka-shing, rose 0.43 percent to HK $57.75 after reporting a flat 2003 net profit of HK $14.38 billion after the close on Thursday.
But analysts predict investors will remain cautious on Hutchison's 3G outlook and said the stock will continue to under perform the market. Citibank downgraded Hutchison to "sell" from "hold" following its 2003 results and slashed earnings targets on the firm.
J.P. Morgan lowered its earnings estimates for Hutchison by 23 percent for 2004 and 2005 due to the steep 3G losses.
Sister firm Cheung Kong (Holdings) reported better than expected results, but its shares dropped 0.75 percent to HK $66.50.
Property shares were among the top performers of the day, with the Hang Seng Properties sub index rising 0.44 percent to 16,162.27.
Newly-listed China shares were mostly lower after a disappointing debut by chip maker SMIC on Thursday.
China's largest chip maker, Semiconductor Manufacturing International Corp (SMIC) was down 6.06 percent at HK $2.32, and now sits almost 14 percent below its offer price of HK $2.69 per share.