Hong Kong stocks fell, paring the benchmark index’s first weekly gain in five, after Newbridge Capital LLC sold shares in Ping An Insurance (Group) Co., and aluminum slid on concern European budget cuts will curb growth.
Ping An, China’s second-largest insurer, declined 2 percent. Aluminum Corp. of China Ltd., the nation’s largest producer of the metal, fell 3.2 percent. North Mining Shares Co. surged 5.7 percent after the real estate investor said it acquired a mine.
“External concerns worry me more because Europe’s problems are about a threat of extending a recession,” said Danny Yan, a portfolio manager at Taifook Asset Management Ltd., which oversees $400 million. “We reduced our cash level last week and increased our holdings in financials because valuations are attractive, and a lot of bad news has been priced in.”
The Hang Seng Index dropped 1.4 percent to close at 20,145.43, halting a two-day, 1.4 percent advance. That pared the measure’s gain this week to 1.1 percent.
The Hang Seng China Enterprises Index, which tracks the so-called H shares of Hong Kong-listed Chinese companies, declined 1.2 percent to 11,588.97.
Shares on the benchmark Hang Seng Index are priced at an average 13.3 times estimated earnings, down from 18 times on Nov. 16, when the index closed at its highest level for 2009, according to Bloomberg data.
Ping An Declines
Concern over budget deficits in Europe and speculation China’s government will tighten money supply have contributed to a 12 percent drop in the Hang Seng from its November high.
Ping An declined 2 percent to HK$62.25. Newbridge Capital LLC, the Asian unit of TPG Capital, raised HK$9.7 billion ($1.25 billion) selling shares in the insurer, a person familiar with the matter said.
Chalco, as Aluminum Corp. is known, fell 3.2 percent to HK$6.97. PetroChina Co., the country’s biggest oil producer, dropped 1.5 percent to HK$8.76. Cnooc Ltd., China’s biggest offshore oil explorer, declined 2.1 percent to HK$12.88.
Aluminum decreased 0.7 percent to $2,154.75 per ton on the London Metal Exchange at 1:09 p.m. Hong Kong time. Crude oil fell 1 percent to $73.68 a barrel in after-hours New York electronic trading.
European Central Bank governing council member Guy Quaden said yesterday the situation facing Greece is worse than in other European nations. Greece has announced three rounds of deficit-reduction measures this year. Last week, it agreed to a new package including wage and pension cuts to qualify for 110 billion euros ($138 billion) in emergency loans from the European Union and the International Monetary Fund.
North Mining rallied 5.7 percent to 37 Hong Kong cents. The company has signed a letter of intent for a proposed acquisition of Heilongjiang Yi Tong Mining Co, according to a statement yesterday.
Alibaba.com Ltd. jumped 5.3 percent to HK$15.82, extending its gains in the past six days to 18 percent. The operator of China’s biggest online commerce site said billionaire investor George Soros bought a stake. The founder of Soros Fund Management LLC visited Alibaba in the summer and has become one of the company’s biggest shareholders after making an investment during the third quarter, Alibaba Chief Executive Officer David Wei said.
Credit Suisse Group AG raised its rating on the stock to “outperform” from “neutral.”
United Co. Rusal rose 0.7 percent to HK$8.31. The world’s largest aluminum producer swung to a first-quarter profit of $247 million from a loss of $638 million a year ago as prices for the metal used in planes and packaging climbed and the value of its 25 percent stake in OAO GMK Norilsk Nickel rose.
Futures on the benchmark Hang Seng Index slid 1.4 percent to 19,927. Almost six stocks declined on the 43-company gauge for each that gained.