Hong Kong Stocks Fall as China Output Growth Slows; Belle Drops

Hong Kong stocks fell, sending its Hang Seng Index to its first weekly decline in three, as expansion of China’s industrial output slowed, overshadowing optimism about U.S. economic growth.

China Railway Construction Corp., a builder of the nation’s rail links, fell 1.1 percent. Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal by market value, slid 1.7 percent. Belle International Holdings Ltd. (1880), a Chinese retailer of women’s shoes, slid for a second day, losing 1.9 percent, after saying management staffs plan to sell existing shares.

“The inflation controls have curbed industrial growth,” said Richard Chen, a strategist at Jianghai Securities Co., said in Shanghai. “This will hurt the outlook for companies’ earnings as tightening measures won’t ease in the near term.”

The Hang Seng Index slid 0.2 percent to 19,866.63 at the close, with about twice as many stocks falling as advancing in the 46-member gauge. The index fell 1.7 percent for the week. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong declined 0.3 percent to 10,468.89.

The Hang Seng Index (HSI) tumbled 14 percent this year on concern global growth will stall amid China’s monetary policy tightening measures, slowing U.S. economic growth and Europe’s debt crisis. Shares on the index traded at 10.6 times forecast earnings, compared with 11.9 times for the Standard & Poor’s 500 Index.

China Railway Construction slid 1.1 percent to HK$3.64. Aluminum Corp. of China dropped 1.7 percent to HK$4.65. Anhui Conch Cement Co., the nation’s biggest producer of the building material by market value, retreated 0.9 percent to HK$26.70.

China’s industrial production slowed for a second month, rising 13.5 percent in August from a year earlier, according to the statistics bureau. That compared with the 13.7 percent median estimate in a Bloomberg News survey.

Consumer prices climbed 6.2 percent in August from a year earlier, matching the 6.2 percent median forecast in a Bloomberg News survey of 31 economists. Prices gained 6.5 percent in July.

Belle International dropped 1.9 percent to HK$14.60. The shares fell the most in more than 2 1/2 years yesterday after saying managers including Chief Executive Officer Sheng Baijiao planned to sell shares.

Among stocks that rose, Yue Yuen Industrial Holdings Ltd. (551), which makes shoes for Nike Inc., gained 1.6 percent to HK$21.80. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., advanced 1.5 percent to HK$14.84.

President Barack Obama called on Congress to pass a jobs plan that would inject $447 billion into the economy through infrastructure spending, subsidies to local governments to stem teacher layoffs, and cutting in half the payroll taxes paid by workers and small-business owners.

“The amount of the U.S. stimulus package was bigger than market expectation, which should be positive for the market,” said Castor Pang, head of research at Core-Pacific Yamaichi International Ltd. in Hong Kong.

Futures on the Hang Seng Index dropped 0.7 percent to 19,723. The HSI Volatility Index sank 1.1 percent to 31.49, indicating options traders expect a swing of 9 percent in the Hang Seng Index in the next 30 days.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.