Hong Kong stocks ended down 0.19 percent on Friday as the week's successive gains triggered profit-taking, but developers such as Sun Hung Kai (SHK) Properties Ltd outperformed to push real estate shares to fresh eight-year highs.
The benchmark Hang Seng index finished down 32.19 points at 16,912.15, ending a four-day gaining streak and logging a weekly gain of 3 percent.
The Hang Seng property sub-index rose 1.5 percent to 21,561.14. It earlier gained touched 21,787.74, a level unseen since October 1997.
Turnover was high at HK$40.9 billion (US $5.2 billion), up slightly from Thursday's HK$39.4 billion. "We have accumulated large gains, so retracement is normal," said Linus Yip, strategist at First Shanghai Securities.
ICBC's ICEA Securities Asia Ltd on Friday raised its year target for the Hang Seng to 19,000, based on a price-to-earnings ratio of 16.4 times 2006 earnings, a similar multiple seen in August 1997 when the gauge peaked at comparable levels.
Properties shone, fuelled by speculation interest rates had peaked and prospective real estate investment trust (REITs) spin-offs by developers like Sun Hung Kai. The city's biggest developer rose 2.4 percent to HK$90.75, earlier having set an eight-year high. Cheung Kong (Holdings) Ltd climbed 1.9 percent to HK$88.05.
Commodities lost ground, tracking retreating metal prices as Zijin Mining Group Co Ltd sank 11 percent to HK$4.35 and Lingbao Gold Co Ltd slid 12 percent to HK$6.90 after gold prices slipped from 25-year highs.
Steelmakers also fell as China is seen likely to take steps to slow steel exports following the country's sharp first quarter GDP growth. China Angang New Steel Co Ltd fell 5.1 percent to HK$7.50 and Maanshan Iron & Steel Co Ltd declined 2.3 percent to HK$3.15.
Harbin Power jumped 9 percent to HK$7.70, and earlier touching a record, as investors saw value in the power equipment maker after its recent sharp fall.
Lianhua Supermarket Holdings Co Ltd rose 6 percent to HK$8.90 after China's top supermarket chain said it wants to tie up with a global retailer.
Geely Automobile Holdings Ltd slumped 5 percent to HK$0.96 after reporting on Friday its 2005 net profit rose 36.3 percent to HK$110.83 million, compared to a Reuters Estimates forecast of HK$113.5 million.