Hong Kong stocks fell, with the benchmark index retreating from its highest level since April 2011, with Ping An Insurance (Group) Co. sliding as HSBC Holdings Plc sold a $7.4 billion stake. The gauge gained earlier on reports from the U.S. and China that showed signs of recovery in the world’s two largest economies.
Ping An slid 2.8 percent with trading volume almost 100 times its five-day average as HSBC’s sale to Thai billionaire Dhanin Chearavanont was cleared by regulators. Citic Resources Holdings Ltd., a Chinese oil and coal producer, slid 2.4 percent after saying it expects a loss for 2012. Techtronic Industries Co., a powertool maker that counts the U.S. as its No. 1 market, rose 4.2 percent.
The Hang Seng Index dropped 0.2 percent to 23,685.01 at the 4 p.m. local time close, after rising as much as 0.9 percent. The Hang Seng China Enterprises Index of mainland companies slumped 0.5 percent to 12,156.58, erasing a gain of 1.1 percent.
“We expect to see some profit taking in the coming few days just before the long holiday because the market itself has been rallying,” said Lewis Wan, Hong Kong-based chief investment officer at Pride Investments Group Ltd., which oversees about $250 million. “The U.S. proved to the market the recovery is very healthy. It sent a very good sentiment to the Hong Kong market. In China, the recovery is also very healthy.”
About five stocks declined for every four that climbed in the 50-member Hang Seng Index, with trading volume about 76 percent above the 30-day average, according to data compiled by Bloomberg.
Hong Kong’s market will be shut for three days next week for the Lunar New Year holidays, while markets in mainland China will be closed for the whole week.
The Hang Seng Index last month capped its fifth monthly advance, the longest such streak since July 2009, after the U.S. Federal Reserve embarked on a third round of quantitative easing in September and as China’s economy showed signs of recovery.
The gauge traded at 11.5 times average estimated earnings on Feb.1, compared with 13.7 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Ping An dropped 2.8 percent to HK$68.90. The shares surged 23 percent from Dec. 4, the day before HSBC announced it was selling its holdings in China’s second-largest insurer, through Feb. 1, when the bank said regulators cleared the second phase of the sale.
HSBC on Dec. 5 said it would sell a 15.6 percent stake in Ping An in two phases for about $9.4 billion. The first installment of 256.7 million shares was transferred on Dec. 7, it said. HSBC declined 0.2 percent to HK$87.85.
Citic Resources fell 2.4 percent to HK$1.20 after saying it expects a “significant” loss for 2012.
Futures on the S&P 500 were little changed. The gauge jumped 1 percent on Feb. 1 after U.S. payrolls rose 157,000 in January following a revised 196,000 advance in December and a 247,000 surge in November. Other reports showed manufacturing in the U.S. expanded more than forecast last month, reaching a nine-month high, while confidence among American households unexpectedly rose.
Techtronic jumped 4.2 percent to HK$15.86. Man Wah Holdings Ltd., a sofa maker that gets about half its sales from the U.S., advanced 1 percent to HK$7.13.
China’s services industries grew at the fastest pace since August as gains in retailing and construction aid government efforts to drive a recovery in the world’s second-biggest economy.
The non-manufacturing Purchasing Managers’ Index rose to 56.2 in January from 56.1 in December, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.
San Miguel Brewery Hong Kong Ltd., the local unit of the Philippine brewer, surged 9.2 percent to HK$1.30 after saying it expects a profit for the year ended Dec. 31 compared with a loss a year earlier.
Futures on the Hang Seng Index slid 0.5 percent to 23,641. The HSI Volatility Index increased 4.7 percent to 13.30, indicating traders expect a swing of 3.8 percent for the equity benchmark in the next 30 days.