Hong Kong stocks erased morning gains to end lower on Wednesday after investors locked in gains from a recent rally. The blue-chip Hang Seng Index ended down 0.07 percent, or 10.16 points, at 14,277.28 on Wednesday, easing from an intraday high of 14,365.05, the highest level seen since March 2001.
Turnover was heavy at HK$22.36 billion (US $2.87 billion) compared with HK$13.57 billion on Tuesday.
"The index should be able to hold up quite well, supported by half-year window-dressing by fund managers," said Andrew To, sales director of Tai Fook Securities.
Traders said the market should continue to tick higher on lingering yuan revaluation speculation and as the earnings season gets into full flight in July.
Property stocks supported the market, led by Wharf Holdings, which jumped 3.04 percent to HK$27.10.
Sun Hung Kai Properties and Henderson Land, two of the city's leading developers, were steady after a recent rally triggered by the government's relaxation of its land sale policy through public auctions.
Sun Hung Kai ended unchanged at HK$76.75 while Henderson Land added 0.54 percent to HK$37.40.
CNOOC, which edged up 0.54 percent to HK$4.625, continued its rally as short-term worries stemming from the firm's bid for Unocal receded.
Analysts said CNOOC's offer for Unocal was well structured with less equity dilution than feared earlier. If the deal goes through, CNOOC would double its oil and gas output and increase its reserves by nearly 80 percent.
PetroChina was steady at HK$5.85 after the stock hit an historic high of HK$5.95 on Tuesday.
Morgan Stanley on Wednesday upgraded its rating on PetroChina to "overweight" from "equalweight" and also lifted its price target to HK$7.10 per share.
"Oil stocks will continue to fare well. Investors should buy on dips," added Tai Fook's To.
Gains in the index were, however, capped by index heavyweights HSBC Holdings Plc and China Mobile. HSBC dipped 0.39 percent to HK$126.5 while China Mobile lost 0.17 percent to HK$29.30.
Meanwhile, state-owned property firm Beijing Capital Land lost 8.89 percent to HK$1.64 after it said that interim results would be "materially and adversely affected" because austerity measures in China last year had delayed approval of new property projects.
China state-run CITIC Resources Holdings jumped 1.89 percent to HK$1.08 after the firm said on Tuesday it planned to buy control of Thai Petrochemical Industry for $900 million.