Hong Kong stocks pared early gains and fell 1.97 percent here Tuesday as investors sold off stocks of Chinese mainland banks and insurers after reports disclosed their exposure of subprime mortgage in the United States.
The benchmark Hang Seng Index once rebounded 273.07 points, or 1.16 percent, to open at 23,858.04 on Tuesday but lacked support to extend its rally during trading.
A local newspaper quoted Liu Mingkang, Chairman of the China Banking Regulatory Commission, as saying that the Chinese mainland banks and insurers had held a subprime mortgage exposure totaling about 15.9 billion U.S. dollars, a report that triggered immediate sell-off of the banking issues and turned around the market momentum.
The index slid 155.89 points, or 0.66 percent, to close the morning session at 23,429.08 and widened its losses in the afternoon before falling 465.1 points, or 1.97 percent, to close at 23,119.87.
Turnover rose to 84.12 billion HK dollars (10.78 billion U.S. dollars) from Monday's 81.12 billion HK dollars (10.4 billion U.S. dollars).
Market heavyweight HSBC outperformed the index by rebounding 0.92 percent to 120.4 HK dollars after it reported a 21 percent increase of net profits attributable to shareholders to 19.13 billion U.S. dollars in 2007 despite its write-down for the subprime mortgage-related assets in the United States.
Another market heavyweight China Mobile, or the country's largest mobile phone operator, declined 1.98 percent to 113.8 HK dollars, pulling down the index by 61.05 points alone.
Oil companies all fell after the crude oil once hit 103 U.S. dollars a barrel in global market. PetroChina, the country's largest oil producer, dropped 3.91 percent to 10.82 HK dollars. CNOOC, China's largest offshore oil company, lost 4.42 percent to 12.12 HK dollars. Sinopec, Asia's largest refiner, plunged 5.29 percent to 8.05 HK dollars.
Hong Kong's property sectors were weaker. SHK Properties, the largest house developer in Hong Kong, fell 2.47 percent to 130.3 HK dollars. Cheung Kong slid 1.83 percent to 112.5 HK dollars. Henderson Land skidded 1.02 percent to 58.1 HK dollars. New World Development dipped 0.24 percent to 20.45 HK dollars. Sino Land declined 3.37 percent to 18.94 HK dollars. Hang Lung weakened 1.96 percent to 27.5 HK dollars.
Hong Kong Exchanges and Clearing Limited, the market's sole operator, fell further by 2.81 percent to 141.6 HK dollars.
Hang Seng Bank, a Hong Kong-based unit of banking giant HSBC, went down 3.26 percent to 142.3 HK dollars as investors chose to take profits after it reported a 51.5 percent surged in its net profit in 2007 to 18.24 billion HK dollars (2.34 billion U.S. dollars).
China Enterprise Index, or H-shares, which was composed of 43 companies registered on the Chinese mainland, fell below the key 13,000 mark by pulling off 467.71 points, or 3.48 percent, to 12, 972.21 following the A-shares markets slump on the Chinese mainland.
The benchmark Hushen 300 Index on the Chinese mainland reflecting the performance of China's Shanghai and Shenzhen stock exchanges plunged 119.59 points, or 2.5 percent, to close at 4,671. 15 amid reports that the inflation on the Chinese mainland might further jumped above 8 percent in February.
Mainland's banking and insurance stock listed on the Hong Kong Exchange all fell following the reports of their exposure of subprime mortgage in the United States.
ICBC, China's largest lender, declined 2.26 percent to 5.2 HK dollars. Bank of China, the country's second largest bank, dropped 2.15 percent to 3.18 HK dollars. China Construction Bank, the third largest bank on the Chinese mainland, dropped 2.58 percent to 5.67 HK dollars. China Life, the country's largest life insurer, fell 3.65 percent to 29 HK dollars. Ping An went down 4.68 percent to 56 HK dollars. (7.8 HK dollars = 1 U.S. dollars)
Source: Xinhua
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