Hong Kong stocks eased 0.4 percent on Thursday with property counters hurt by interest rate jitters and oil shares lower on retreating oil prices. Property developer New World Development Co Ltd was among the top blue chip losers, down 1.9 percent to HK$10.20 as investors eyed rate hikes in Thailand and Indonesia and watched for signs on whether the US will pause or continue raising rates after Hurricane Katrina.
The Hang Seng Properties sub index fell 0.4 percent. "Everyone is still waiting for word from the Fed," said Trevor Cheung, strategist at DBS Vickers.
The US central bank's rate setting committee is due to meet later this month in the wake of the devastating hurricane in Louisiana. Some observers see the Fed pausing its rate rise cycle to offset the disaster's impact on economic growth, but others see another small rise to combat inflationary pressures aggravated by rising energy prices.
Top offshore oil firm CNOOC Ltd fell 2.7 percent to HK$5.40 as oil prices retreated below US $65 a barrel. China's largest oil producer PetroChina Co Ltd fell 1.6 percent to HK$6.20.
The blue chip Hang Seng Index fell 58.4 points, or 0.38 percent, to 15,166.17.
Traders said the market was settling into a short-term trading range amid a lack of fresh impetus following a recent 500-point rebound to near three-week highs.
Volume was below recent averages with HK$16.8 billion (US $2.15 billion) worth of shares exchanged.
Mid-tier developer Great Eagle Holdings Ltd was a top loser after its first-half results disappointed analysts and showed not all property firms were benefitting from a recent surge in retail rents.
"Hong Kong rental income came in 15 percent lower than expected and was partially due to a one-off event that a key tenant was renewing its leases at a lower rent," Merrill Lynch said in a research note.
Great Eagle fell 7.6 percent to HK$21.75. Morgan Stanley downgraded the firm to "equalweight" citing rising rates and the firm's large debt burden.
Solomon Systech International Ltd, which designs semiconductors that power the displays on cellphones and MP3 players, jumped 13.2 percent to HK2.57 after it posted a near 62-percent jump in first-half net profit as its market share grew.
Founded by former employees of Motorola Inc, Solomon Systech counts the US cellphone giant as its largest customer and said it expects high double-digit shipment growth in the second half to counter lower, but stabilising, selling prices. Shares in ports and container leasing firm COSCO Pacific rose 1.3 percent to HK$15.85 after its first half profits more than doubled thanks to China-driven growth in seaborne trade.