Oct. 28 (Bloomberg) -- Hong Kong’s benchmark stock index fell to a two-week low, with developers sliding as the city’s government seeks to curb property market speculation. HSBC Holdings Plc dropped after saying U.S. credit-card defaults surged last month.

Sino Land Co., this year’s best performer on the Hang Seng Property Index, declined 4.6 percent. HSBC, the biggest foreign issuer of credit cards in the U.S., declined 1.2 percent. Wynn Macau Ltd., controlled by billionaire Steve Wynn, plunged 7 percent after its parent reported a 33 percent drop in third- quarter profit.

For property stocks, “it’s more of a psychological impact,” said Marco Mak, head of research at Tai Fook Securities Ltd. “As long as the government isn’t having any administrative intervention, the pullback will be short term.”

The Hang Seng Index slid 1.8 percent to 21,761.58, its lowest close since Oct. 13. The Hang Seng China Enterprises Index, which tracks so-called H-shares, slipped 2.4 percent to 12,831.18.

The Hang Seng Index has surged 92 percent from a low for the year on March 9 as stimulus measures revived economies around the world. Shares on the gauge are priced at an average 17.4 times estimated profit, up from 10.6 times at the start of 2009, according to data compiled by Bloomberg.

Cheaper Land Needed

Sino Land declined 4.6 percent to HK$14.80. New World Development Ltd., a Hong Kong-based developer, slipped 4.3 percent to HK$16.78. The shares were the biggest losers by percentage on the Hang Seng Index. Property stocks extended yesterday’s fall after the Hong Kong Monetary Authority raised deposit levels for luxury apartments on Oct. 23.

The city’s biggest developers signaled they want cheaper land as the government seeks to increase supply and curb speculation after home prices surged 28 percent this year.

“The developers are requesting the government put the prices closer to the market level,” Stewart Leung, an executive director at New World said yesterday after a meeting with the city’s Financial Secretary John Tsang.

HSBC fell 1.2 percent to HK$86.85. The bank said defaults surged 48 percent in September. Write-offs for loans deemed uncollectible in the HSBC Credit Card Master Note Trust climbed to 14.24 percent, the London-based bank said yesterday. Wynn Macau plunged 7 percent to HK$9.12. Its parent Wynn Resorts Ltd., controlled by billionaire Stephen Wynn, yesterday dropped the most in five months in U.S. trading after saying net income fell to $34.2 million from $51.2 million a year earlier.

Casino Stocks Slide

Galaxy Entertainment Group Ltd., the Macau casino operator whose market value has more than tripled this year, fell 3.9 percent to HK$3.43. SJM Holdings Ltd., billionaire Stanley Ho’s holding company, declined 3.8 percent to HK$4.04. Melco International Development Ltd., controlled by Stanley Ho’s son Lawrence Ho, slumped 6.3 percent to HK$4.17.

China Shipping Container Lines Co. dipped 4 percent to HK$2.91. The country’s second-biggest carrier of cargo boxes reported yesterday a fifth-straight quarterly loss as the global recession saps world trade. The net loss widened to 1.94 billion yuan ($284 million) in the third quarter from 247 million yuan a year earlier, the company said.

China Petroleum & Chemical Corp., the country’s largest oil refiner, dropped 1.9 percent to HK$6.72. The company is incurring refining losses this month because increases in domestic fuel prices haven’t been proportionate to gains in crude oil costs, said Zhang Jianhua, a vice president at the company known as Sinopec.

Mainland Spending Power

Wharf (Holdings) Ltd., owner of two of Hong Kong’s biggest malls, climbed 1.1 percent to HK$43.05. Goldman Sachs Group Inc. raised its share-price estimate for the stock 28 percent to HK$50, and maintained its “buy” rating, saying the developer will benefit from the “strong buying power of mainlanders,” according to a research note today.

Nine Dragons Paper Holdings Ltd., a maker of containerboard and paper for packaging, was suspended today after dropping 0.3 percent to HK$12.18 yesterday. The company plans to raise as much as $350 million selling new shares at HK$10.85 to HK$11.50 each, an e-mail sent to fund managers today said.

Brilliance China Automotive Holdings Ltd. also halted its shares from trading in the afternoon session. It didn’t give a reason for the suspension. Its shares rose 0.8 percent to HK$1.29 before the halt.

All but six stocks on the 42-member Hang Seng Index dropped. October futures slipped 2.3 percent to 21,689.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net

Last Updated: October 28, 2009 04:49 EDT