Hong Kong share prices closed 1.07 percent lower on Tuesday, as investors grabbed profits following recent rallies in the property sector, dealers said. The benchmark Hang Seng Index lost 194.90 points to end at 18,058.49. Turnover was 71.93 billion Hong Kong dollars (9.22 billion US).
Dealers said the local market was likely to consolidate further in the near term after its recent rally. The Hang Seng Index has risen 16 percent since the end of April. "The Hang Seng Index's current level is far beyond its fundamentals but strong liquidity still provides support," said Castor Pang, a strategist at Sun Hung Kai Financial, according to Dow Jones Newswires.
Hong Kong's stock market has been flush with foreign capital as the city's equities are regarded as a proxy investment in China's economic growth. China limits foreign investment in mainland bourses. "The near-term direction of the local market will primarily depend on news flow and trading is likely to remain volatile," Pang added.
Local developers led the profit-taking in blue chips. Sun Hung Kai Properties dropped 1.1 percent to 94.35 dollars after rising 18 percent since the start of May, and Sino Land fell 3.7 percent to 13.12 after gaining 36 percent in the same period.
Wharf was down 2.2 percent at 29.45 dollars after it rose 17 percent since May. Profit-taking in Industrial & Commercial Bank of China also weighed on the local market. It fell 2.3 percent to 4.75 dollars after rising 22 percent since the start of April. Internet portal company Tencent dropped 4.4 percent to 85.70 dollars after a 30 percent gain since the end of April.