Hong Kong stocks fell for a second day, with the benchmark index posting its biggest weekly drop in three months, on concern the U.S. may cut stimulus and that rising home prices in China will spur additional property curbs.
Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, slipped 1.1 percent. Man Wah Holdings Ltd., a sofa maker that gets about half of sales from the U.S., dropped 2.7 percent. Belle International Holdings Ltd. declined 5.4 percent after analysts from Nomura Holdings Inc. and CCB International Securities Ltd. downgraded shares of the shoe retailer.
The Hang Seng Index declined 0.5 percent to 22,782.44 at the close in Hong Kong. The gauge fell 4.4 percent since reaching an 18-month high on Jan. 30 on concern China will add measures to cool the property market. Fed Bank of St. Louis President James Bullard yesterday said an improving jobs market next year may prompt the Fed to raise its key rate.
“Investors are using this talk of policy tightening in China and the U.S. as an excuse to take some profit off the table since the market has been overbought,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., which oversees about $51 billion.
Trading volume on the Hang Seng Index was 3.5 percent lower than the 30-day average, according to data compiled by Bloomberg News. The gauge declined 2.8 percent this week, the biggest weekly drop since Nov. 9.
Shares on the benchmark Hang Seng Index traded at 11 times estimates earnings, compared with 13.6 times for the Standard & Poor’s 500 Index and 12.2 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Hang Seng China Enterprises Index dropped 1 percent to 11,317.13. The gauge of mainland companies yesterday erased gains for the year after Chinese Premier Wen Jiabao called on local authorities to “decisively” curb real estate speculation. Home prices in January climbed in 53 of the 70 cities the government tracks, the National Bureau of Statistics said today.
Chinese lenders and developers dropped. ICBC, as the country’s top lender is known, fell 1.1 percent to HK$5.49. Bank of China Ltd., the nation’s fourth-largest lender, declined 1.6 percent to HK$3.65. New World Development Co., a Hong Kong-based builder that gets about half of sales from China, slid 1.1 percent to HK$13.24. Sino-Ocean Land Holdings Ltd. fell 1.1 percent to HK$5.27.
Exporters to the U.S. fell. Man Wah slipped 2.7 percent to HK$6.97. Yue Yuen Industrial (Holdings) Ltd., a maker of shoes for Nike Inc. and Adidas AG, decreased 2.6 percent to HK$26.45.
Air China Ltd., the nation’s biggest carrier by market value, slumped 5 percent to HK$6.22 after Bank of America Corp.’s Merrill Lynch cut its rating on the stock to underperform from buy.
Belle dropped 5.4 percent to HK$14.46. Nomura and CCB International reduced the stock’s rating to neutral. The shares plunged a record 17 percent yesterday after the company said full-year 2012 profit will come in at the lower end of analyst estimates.
Hopewell Highway Infrastructure Ltd. slid 6.4 percent to HK$4.23 after the operator of Chinese toll roads reported first-half profit fell 34 percent from a year earlier.
Among stocks that advanced, China Overseas Land & Investment Ltd., the biggest mainland developer traded in Hong Kong, rose 1.8 percent to HK$22.30. The company aims to achieve double-digit growth in sales and earnings this year, newspaper The Standard reported, citing chairman Kong Qingping.
The HSI Volatility Index gained 1.6 percent to 15.83, indicating traders expect a swing of about 4.5 percent during the next 30 days. Futures on the Hang Seng Index expiring this month lost 0.5 percent to 22,754.