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Hong Kong Stocks Decline After China GDP, Factory Data

Hong Kong
Two International Finance Center (IFC), center, and other buildings stand illuminated at night in the Central district in Hong Kong, China. Photographer: Brent Lewin/Bloomberg

Jan. 20 (Bloomberg) -- Hong Kong stocks fell, with the city’s benchmark index falling for the first time in four days, as China reported slowing economic growth.

Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, decreased 2.1 percent. Glorious Property Holdings Ltd. tumbled by a record after shareholders rejected Chinese billionaire Zhang Zhirong’s offer to take the property developer private. Zhaojin Mining Industry Co., China’s No. 2 gold producer, climbed 4 percent as gold rallied to the highest level in almost six weeks.

The Hang Seng Index slid 0.9 percent to 22,928.95 at the close in Hong Kong, with about six stocks declining for each that rose on the 50-member gauge. The Hang Seng China Enterprises Index of mainland companies listed in the city declined 1.3 percent to 10,040.16.

“The GDP figures are acceptable and in line with market expectations because we’re in reform years,” said Linus Yip, a strategist at First Shanghai Securities Ltd. “Overall GDP growth seems stable, though the market may need another quarter of data to regain confidence that we’re on the right track.”

China’s economy grew 7.7 percent in the fourth quarter from a year earlier, slowing from 7.8 percent the previous quarter while beating an estimate for a 7.6 percent expansion, data from the National Bureau of Statistics showed today.

‘Reasonable Range’

Industrial production increased 9.7 percent in December from a year earlier, compared with the 9.8 percent median prediction of analysts. Retail sales in December rose 13.6 percent, matching forecasts, the report showed.

The government’s policies and planning this year will focus on maintaining economic expansion in a “reasonable range,” Premier Li Keqiang told economists and business leaders last week, the official Xinhua News Agency reported on Jan. 17. He indicated in July his “bottom line” for expansion was 7 percent.

A measure of financial companies led declines on the Hang Seng Index. ICBC dropped 2.1 percent to HK$4.78, while China Construction Bank Corp., the nation’s second-largest lender, slid 1.8 percent to HK$5.39.

The Hang Seng Index dropped 1.6 percent this year and trades at 10.1 times estimated earnings, compared with 15.6 for the Standard & Poor’s 500 Index on Jan. 17. The H-share index declined 7.2 percent this year and traded at 6.7 times estimated earnings, near levels reached during China’s cash crunch in June.

Glorious Property tumbled 27 percent to HK$1.25, its steepest drop on record. An offer by billionaire Zhang to take the company private lapsed after 62 investors voted against the plan and 58 holders voted in favor, according to a filing to the city’s stock exchange. Zhang can’t make another bid for 12 months, except with regulatory consent, the company said in the statement Jan. 17.

Futures on the S&P 500 slipped 0.2 percent today. The measure dropped 0.4 percent on Jan. 17 as earnings at companies from General Electric Co. to Intel Corp. disappointed investors. U.S. equity markets are closed for a holiday today.

Among stocks that rose, Zhaojin Mining gained 4 percent to HK$4.66, while Zijin Mining Group Co., China’s largest producer of the precious metal, advanced 1.2 percent to HK$1.70. Gold rallied to the highest level in almost six weeks on signs of increasing demand as holdings in the biggest exchange-traded product expanded the most since 2011.

To contact the reporter on this story: Jasmine Ng in Singapore at jng299@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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