HK stocks lost nearly 2% on faltering U.S. economy

08:53, August 04, 2011      

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Hong Kong stocks fell almost 2 percent on Wednesday after a rating agency warned the United States may be downgraded and an unexpected decline in consumer spending increased concern that the country's economy is faltering.

Hong Kong stocks lost 428.74 points, or 1.91 percent, to close at 21,992.72. The benchmark Hang Seng Index traded between 21,882.78 and 22,041.87. Turnover totaled 81.832 billion HK dollars (about 10.495 billion U.S. dollars).

The Hang Seng China Enterprises Index went down 271.68 points, or 2.21 percent, to close at 12,007.10.

All four sub-indices lost more than 1 percent, with the Commerce and Industry going down the most by 2.13 percent, followed by the Finance 1.81 percent, the Utility 1.67 percent and the Properties 1.64 percent.

All main banks closed lower after the trading session. Both ICBC and Bank of China dropped 2.25 percent to 5.64 HK dollars and 3.78 HK dollars respectively. China Construction Bank went down 1. 95 percent to 6.03 HK dollars and Agricultural Bank of China suffered a 1.68 percent lost to 4.1 HK dollars. Banking giant HSBC lost 1.16 percent to 77 HK dollars.

Insurance blue chips also suffered during Wednesday's trading. Ping An dropped 2.72 percent to 73.25 HK dollars. China Life lost 2.11 percent to 25.55 HK dollars. AIA went down 1.9 percent to 28.35 HK dollars.

All the three oil constituents suffered a more than 2 percent lost. The Hong Kong listed unit of China's National Offshore Oil Corporation, CNOOC, moved down 2.76 percent to 16.92 HK dollars. China's largest oil and gas producer PetroChina dropped 2.52 percent to 10.84 HK dollars. The country's top refiner Sinopec lost 2.1 percent to 7.46 HK dollars.

All the Commerce and Industry constituents went down Wednesday. Li & Fung Ltd., the world's biggest supplier to retailers including Wal-Mart Stores Inc., slumped nearly 5 percent to a two-year low of 12.3 HK dollars. China Shenhua went down 2.45 percent to 38.55 HK dollars and China Mobile closed at 75.2 HK dollars, losing 2.02 percent.

Property heavyweights also closed lower generally. SHK Prop lost 1.7 percent to 116 HK dollars and Cheung Kong closed at 119.7 HK dollars, losing 1.32 percent.

Moody's Investors Service, a credit rating agency, warned Tuesday in a statement that the AAA credit ratings for U.S. could be downgraded if lawmakers fail to enact debt reduction measures and the country's economy weakens. Meanwhile, the US Commerce Department figures showed that purchases slid 0.2 percent in June after a 0.1 percent gain in May. (1 U.S. dollar = 7.797 HK dollars)



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