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Hong Kong Stocks Drop Before China’s Data, Paring Weekly Gains

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April 12 (Bloomberg) -- Hong Kong stocks fell for the first time in four days, with the benchmark index paring this week’s gains ahead of the release of China’s economic growth data next week. Lenovo Group Ltd. slumped after Citigroup Inc. recommended selling the shares.

Lenovo, the world’s second-biggest maker of personal computers, tumbled 6.1 percent. Miners declined after surging earlier this week, while oil producers retreated on lower crude prices. AAC Technologies Holdings Inc., an acoustic components maker that gets half its revenue from the U.S., climbed 2.1 percent after a report showed U.S. jobless claims declined.

The Hang Seng Index dropped 0.1 percent to 22,089.05 at the close, paring the five-day gain to 1.7 percent. About an equal number of stocks slid as advanced, with trading volume 25 percent below its 30-day intraday average. The Hang Seng China Enterprises Index, which tracks mainland shares, dropped 0.5 percent to 10,655.68.

“Sentiment was boosted by improved data or performance from the western world, but we’re more focused on Chinese economic data and market performance,” said Jackson Wong, vice president at Hong Kong-based brokerage Tanrich Securities Co. “At current levels, valuations are still attractive. We just lack some catalyst. Investors are trading on technicals and fund flows rather than fundamentals. We need some positive catalyst for the market to have an upside breakthrough.”

Hong Kong’s benchmark index closed today at 10.6 times estimated earnings, compared with its five-year average of 12.8 and the Standard & Poor’s 500 Index’s multiple of 14.4, data compiled by Bloomberg show.

Bird Flu, Cyprus

The Hang Seng Index has slid 7.3 percent from a Jan. 30 high amid concern bird flu might spark an epidemic in China and Cyprus’s banking woes will reignite Europe’s debt crisis. Shares pared losses this week as slower-than-estimated inflation data in China eased pressure on policy makers to tighten credit.

In China, the National Bureau of Statistics will release first-quarter economic growth data on April 15 along with March figures for industrial production and retail sales and first-quarter fixed-asset investment. The world’s second-largest economy probably grew 8 percent from a year earlier in the January-March period, according to the median forecast, down from an 8.2 percent projection in February.

Lenovo slumped 6.1 percent to HK$6.66, the biggest drop on the Hang Seng Index and its most actively traded stock by value, after Citigroup cut to sell from buy its rating on the stock. The shares fell 5.8 percent yesterday after market-research firm Gartner Inc. said global personal-computer shipments declined 11 percent in the first quarter.

Materials, Energy

Materials and energy posted two of the three biggest declines among 11 industry groups in the Hang Seng Composite Index’s. Aluminum Corp. of China Ltd., the nation’s largest supplier of the light metal by market value, dropped 2 percent to HK$3.01 and United Co. Rusal, the world’s largest aluminum producer, dropped 3.4 percent to HK$4.25 after surging more than 9 percent earlier this week. Jiangxi Copper Co., China’s largest supplier of the metal, declined 1.2 percent to HK$16.46.

Cnooc Ltd., a state-owned Chinese offshore energy explorer, slid 0.6 percent to HK$14.18. PetroChina Co., the nation’s largest energy producer, fell 0.8 percent to HK$9.90 after crude oil for May delivery slid 1.2 percent yesterday in New York.

Developers Gain

Property developers had the biggest gain among the Hang Seng Index’s four industry groups. China Overseas Land & Investment Ltd., the largest mainland real estate company traded in Hong Kong, increased 1.2 percent to HK$21.85 while Hang Lung Properties Ltd., the Hong Kong-based company investing more than $8.5 billion building malls in mainland China, climbed 1.2 percent to HK$29.65.

Existing home sales in Beijing almost quadrupled from a year earlier, Centaline Property Agency said in an e-mailed statement today.

Futures on the Standard & Poor’s 500 Index dropped 0.2 percent today. The gauge closed at a record as retailers climbed amid rising March sales for U.S. counterparts, and as jobless claims fell more than estimated.

Jobless claims decreased by 42,000 to 346,000 in the week ended April 6 from a revised 388,000, Labor Department figures showed yesterday in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a drop to 360,000.

AAC Technologies gained 2.1 percent to HK$38.55, while Yue Yuen Industrial (Holdings) Ltd., a supplier to Nike Inc., climbed 1 percent to HK$26.20.

Hang Seng Index futures declined 0.1 percent to 22,116. The HSI Volatility Index increased 1.5 percent to 16.56, indicating traders expect a swing of 4.7 percent for the equity benchmark 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

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