Hong Kong blue chips set a new record high before easing 0.31 percent on Friday as investors booked profits in cellular operator China Mobile, ending its five-day run. Top mainland lender Industrial & Commercial Bank of China jumped in its first trading day after a record US $19 billion initial public offering.
China plays saw their biggest one-day percentage drop in more than four months as investors took profit in mainland lenders that had gained sharply ahead of ICBC's debut.
The benchmark Hang Seng index hit an all-time high at 18,465.54 in the morning to top its previous record of 18,397.57, set in March 2000. The index eased in afternoon trade as profit-takers stepped in, ending at 18,297.55, down 56.19 points. Still, the Hang Seng managed a 1 percent gain for the week.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, fell 2 percent to 7,406.02 in its biggest one-day percentage decline since June 20.
Turnover was HK$76.02 billion (US $9.7 billion), short of the record HK$79 billion (US $10.1 billion) set on August 28, 1998, when the city's government poured billions of dollars to prop up the stock market after the late 1990s Asian financial crisis.
"The run has been spectacular," said Peter Pak, vice president at BOCI Research Ltd. "We're way beyond most people's expectation. In the next two to three days, there may still be momentum given there's lots of money from the IPO released back into the market."
But many market participants said stocks may retreat in the week ahead. "The Hang Seng index may not have too much more upside," said Alex Wong, director at Shenyin Wanguo Asset Management. "We do need some correction to the short-term overbought condition." Top lender ICBC ended at HK$3.52, near its intraday low of HK$3.49 for a 14.7 percent gain above its IPO price of HK$3.07, amid pent-up demand for its shares following the company's massively oversubscribed IPO. Shares in ICBC, whose listing ceremony drew Hong Kong's chief executive Donald Tsang, had traded as high as HK$3.63.
Top cellular operator China Mobile Ltd eased 0.4 percent to HK$62.35. It had earlier set a fresh six-year high - the fourth in as many days. The world's top cellular operator has been the main driver behind Hang Seng's recent ascent.
"The strength of China Mobile is partly because the other blue chips lack a compelling earnings story. HSBC is another strong blue chip, but the US property market is still an overhang," Wong said. Global lender HSBC Holdings Plc shed 0.2 percent to HK$146.8.
Investors also cashed in shares that had run up ahead of ICBC's trading debut. China Construction Bank fell 3.02 percent to HK$3.53 and China Merchants Bank shed 2.64 percent to HK$11.82 despite posting better-than-expected quarterly earnings on Thursday.
Hong Kong Exchanges and Clearing Ltd slid 3.55 percent to HK$62.45, ending an 11-day gaining streak that had been propelled by speculation on massive turnover following ICBC's debut. China Life, the biggest drag on the H-share index, dropped 3.73 percent to HK$16.02.