Hong Kong shares closed lower, mirroring regional peers hurt by mounting tensions on the Korean peninsula, but property firms rose, encouraged by a spin-off plan by a local developer. The Hang Seng index fell 0.4 percent to 27,757.09 points, easing off more than two-year highs hit on Tuesday, while the China Enterprises Index lost 1.1 percent to 10,962.60 points.
Developers performed strongly after Hong Kong-based conglomerate Wharf Holdings said that its unit Wharf Real Estate Investment Co Ltd would submit an application for a separate listing on the main board. Wharf leaped 14 percent higher while fellow developer Henderson Land Development Co ended up 2.6 percent.
Alex Wong, director at Ample Finance Group in Hong Kong, said that the market was upbeat about the Wharf spin-off. "This also pushed up other developers because people think if they do similar things then they will get revalued as well," he said. Tensions over North Korea, which battered stock markets in Japan and South Korea, were not as keenly felt in Hong Kong, Wong said.
Tencent Holdings, which succumbed to profit-taking in the morning session, ended the day up 0.5 percent at a third consecutive record high of HK$330.20. Tencent's rise has powered the Hang Seng index in recent days on investor optimism over the company's second-quarter results, due August 16. Tencent shares have risen nearly 70 percent this year.