Wednesday, June 17, 2009

HK Shares Drop For Third Day, China Stocks Bounce Back

. Wednesday, June 17, 2009

By stockOzone team

Chinese stocks rose 1.23 percent in light turnover on Wednesday, led by a surge in property shares, with China Vanke (000002.SZ) jumping nearly its 10 percent daily limit on signs of strong real estate sales.

Hong Kong shares finished lower for third straight day on Wednesday as resources-linked stocks weighed, but the main index bounced off early lows led by a late rally in Chinese banks.

The benchmark Hang Seng Index was down 80.90 points or 0.5 percent at 18,084.60. The index fell to 17,833.77 during the morning session.

"Despite the nearly 1,000 point correction so far this week, it's pretty clear the selling pressure is still not very high. But what is noticeable is that we are losing momentum because of the strength in the dollar and U.S. rate concerns," said First Shanghai Securities strategist Linus Yip.

China Construction Bank (0939.HK) rose 1.3 percent to HK$5.69, while top lender ICBC (1398.HK) advanced 2.1 percent to HK$5.32 as investors chased up stocks that have lagged the recent rally.

The China Enterprises Index of top mainland companies slipped 16.17 points or 0.2 percent to 10,700.15.

Dongfeng Motor Group (0489.HK) vaulted 11 percent after reporting a $124.6 million profit for the first quarter of 2009.

Turnover dropped to HK$74.5 billion from Tuesday's HK$76.5 billion.

Commodity stocks, battered by weak oil and metals prices on Tuesday, fell further in another rocky session even as crude oil inched up to $71 per barrel on a weaker U.S. dollar.

Asia's largest energy producer PetroChina (0857.HK) fell 1.3 percent to HK$8.65, while offshore oil producer CNOOC (0883.HK), which was the biggest drag on the main index, dropped 2 percent.

China Resources Gas (1193.HK) tumbled 8.5 percent to HK$5.36 after Credit Suisse (CSGN.VX) and Morgan Stanley (MS.N) sold down a combined 11.7 percent stake in the company at HK$4.6 per share, which represents a 21.5 percent discount to Tuesday's closing price.

Link REIT (0823.HK) jumped 3.2 percent after reporting a 13.5 percent increase in its total distributable income for the year ended March 2009.

Ping An (2318.HK) slid 2.3 percent to HK$53, falling for a third straight day after announcing a deal to increase its stake in mid-sized lender Shenzhen Development Bank (000001.SZ) to up to 30 percent.

The stock has given up more than 10 percent, or $2 billion, in market value this week as analysts deemed the deal expensive and cut their rating on China's second-largest insurer.

In Shanghai, Ping An (601318.SS) edged up 0.36 percent to 44.01 yuan, stabilising after dropping 4.9 percent on Tuesday, while Shenzhen Development Bank (000001.SZ) lost 1.73 percent to 22.20 yuan, giving back part of a 13 percent gain in the previous two sessions.

Disclosure: Author does not own any of the stocks discussed here.

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