Reuters: Financial Services and Real Estate: Hong Kong shares suffer worst day in 5 months, China outperforms

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Hong Kong shares suffer worst day in 5 months, China outperforms May 7th 2012, 08:53 Mon May 7, 2012 4:53am EDT (Updates to close) * HSI slumps 2.6 pct, CSI300 up 0.1 pct * 2012 outperformers hit, investors cut risk after Europe * Chinese oil majors slide as oil prices hammered * Chalco strong on reported market-leading rare earths role By Clement Tan HONG KONG, May 7 (Reuters) - Hong Kong shares fell 2.6 percent on Monday, recording their worst loss in five months as renewed doubts about the euro zone debt crisis after elections in Greece and France hit oil firms and outperforming stocks. Mainland Chinese markets finished mostly flat, as strength in Aluminum Corporation of China (Chalco) offset weakness in developers. The Shanghai Composite Index ended flat, while the broader CSI300 Index gained 0.1 percent. The Hang Seng Index finished at 20,536.7, the lowest close since April 12. The China Enterprises Index of the top Chinese listings in Hong Kong lost 2.8 percent. For every stock listed in the territory that rose, four suffered losses. Excluding sessions with turnover bumped up by block placements, total bourse turnover neared the highest in slightly over a month, but was still some way off the levels seen in the selloff in the third quarter last year. "It's not as bad as anything we've seen last year. The selling was heaviest in the first hour of trade this morning, probably as a reaction to overnight news on Europe," said Jackson Wong, Tanrich Securities' vice-president of equity sales. CNOOC Ltd and PetroChina Co Ltd slumped 4.2 and 3.4 percent in Hong Kong, respectively, hit by sliding oil prices after the French and Greek elections raised concerns about the euro zone's austerity measures and reignited fears of falling energy demand. Fuel prices in the mainland could be cut as early as this week due to the drop in global oil prices, the official Shanghai Securities News reported on Monday. PetroChina lost 1 percent in Shanghai. Since Friday, U.S. crude has lost more than 6 percent, while Brent has dropped over 4 percent. Chinese Internet giant Tencent Holdings lost 4.9 percent, further slipping from an all-time high recorded last Thursday after the Facebook initial public offering pricing disappointed investors. Tencent, which had risen partly due to spillover optimism about the Facebook IPO, has shed 6.5 percent in the last two sessions since Facebook priced its IPO at the middle of an indicative range, but is still up 48 percent on the year. CHALCO'S RARE STRENGTH DRIVES MAINLAND GAINS Strength in Chalco helped reverse midday losses on the CSI300 Index. It gained 4.2 percent in triple its 30-day average volume in Shanghai. In Hong Kong, it gained 0.6 percent in almost triple its 30-day average volume. The official China Securities Journal on Sunday cited the vice minister for industry and information technology as saying that Chalco's parent company, Sinalco, will play a leading role in the consolidation of the rare earth industry. Chalco's Hong Kong listing is up 7.7 percent this year after taking a 52 percent hammering in 2011, starkly underperforming benchmark indices in both cases. Chinese property developers, among the top performers this year, were among the hardest hit in both Hong Kong and China. Losses were exacerbated by media reports that the country's largest lender, Industrial and Commercial Bank of China (ICBC) , suspended a discount on mortgages for first-time home buyers. The Shanghai property sub-index was down 0.7 percent. Shenzhen-listed China Vanke, the country's largest developer by sales, slipped 1.6 percent. In Hong Kong, Chinese developers seen to be more mass market players such as Country Garden Holdings slumped 6.3 percent. (Editing by Nick Macfie) Link this Share this Digg this Email Reprints

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