Hong Kong Stocks Drop Most in Three Weeks as Cnooc Leads Losses

Cnooc Warns of $1.2B 1H Loss

Hong Kong stocks dropped the most in three weeks as Cnooc Ltd. slumped after warning of a loss and some of the city’s best-performing stocks this month retreated.

The Hang Seng Index fell 1.3 percent, with all but 5 of its 50 constituents closing lower. Cnooc, China’s biggest offshore oil and gas producer, posted its biggest decline in a month after projecting about $1.2 billion in first-half losses. Cheung Kong Property Holdings Ltd. slid for the first time this week, paring its monthly advance to 15 percent. The MSCI Hong Kong Small Cap Index sank the most in a month as Tech Pro Technology Development Ltd. plunged for a second day after a short-seller report.

“In afternoon trading, there was some spillover into the broader market from a heavy selloff among some small stocks,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Profit-taking intensified too after share prices surged recently to high levels among some big caps, including developers.”

The Hang Seng Index climbed 5.3 percent this month and entered a bull market as property developers rallied on optimism interest rates will stay low for longer and home prices in the city started to rebound.

The benchmark equity gauge fell to 21,891.37 at the close, while the Hang Seng China Enterprises Index lost 1.4 percent to 8,958.97.

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