HK stocks end at nearly five month low

20:19, January 26, 2010      

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Hong Kong shares on Tuesday plunged 2.38 percent to a four-and-a-half-month closing low, led by Chinese banks shares, tracking the continued weakness on Chinese mainland's markets.

The blue-chip Hang Seng Index fell 489.22 points, or 2.38 percent, to close at 20,109.33, its lowest closing level since Sept. 3, when it ended at 19,761.

The index opened at its intraday high of 20,560.11, and hit an intraday low of 20,046.60 in the afternoon session.

Market turnover totaled 77.38 billion HK dollars (9.96 billion U.S. dollars), up from 63.40 billion HK dollars (8.17 billion U.S. dollars) on Monday.

Analysts said they expect the benchmark index to fall further in the near term, and may break psychological support of 20,000 points.

All the four major sub-indices lost ground. The commerce and industry fell most at 2.7 percent, followed by the properties at 2. 7 percent, the finance at 2.28 percent, and the utilities at 0.53 percent.

Uncertainties over Chinese banks' fund-raising plans and possible further tightening measures will continue to weigh on both the Hong Kong and Chinese mainland's markets in the short term, some analysts said.

The benchmark Shanghai Composite Index, which tracks both A and B shares, ended down 2.4 percent at 3019.39, its lowest closing level in about three months.

Chinese lenders led the blue-chip declines in Hong Kong on capital-raising concerns. Bank of China fell 3.4 percent to 3.68 HK dollars, extending Monday's 2.1 percent fall, after announcing plans to issue new shares and convertible bonds, whose combined value could reach tens of billions of U.S. dollars.

ICBC ended down 3.4 percent at 5.61 HK dollars. China Construction Bank closed 2.9 percent lower at 5.95 HK dollars and Bank of Communications fell 3.4 percent to 7.90 HK dollars.

Chinese insurers also fell because of weakness in Chinese mainland's markets. China Life Insurance dropped 4.0 percent to 33. 85 HK dollars and Ping An Insurance ended down 5.1 percent at 59. 30 HK dollars.

Heavyweight HSBC edged down 0.24 percent to 84.1 HK dollars.

Contract handset maker Foxconn International was the worst- performing blue chip, plunging 8.7 percent to 8.08 HK dollars, after the company said it expects to report a 'significant decline ' in 2009 net profit because of foreign-exchange volatility, asset impairment and falling prices.

Source: Xinhua
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