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Hong Kong stocks end 1.61% lower

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(Globalpost/GlobalPost)

Hong Kong stocks closed down 1.61 percent Wednesday as a downgrade of China's growth outlook by the International Monetary Fund raised concerns about recovery in the world's second largest economy.

The benchmark Hang Seng Index fell 369.32 points to 22,554.93 on turnover of HK$63.80 billion ($8.22 billion).

The International Monetary Fund cut its 2013 growth forecast for China to "around 7.75 percent", a top official said, citing a sluggish global recovery which hurt exports.

It had previously predicted 8.0 percent growth in China.

"China-related stocks will likely remain under pressure as the economic slowdown is cooling investor interest in mainland-related shares," Capital Securities research director Jasper Tsang told Dow Jones Newswires.

The property sector was the worst performer, with Sun Hung Kai Properties falling 2.5 percent to HK$105.8, while Wharf Holdings was down 5.7 percent at HK$69.9.

Among banking stocks, Bank of China fell 1.1 percent to HK$3.73, while ICBC declined 1.5 percent to HK$5.42.

Chinese stocks closed up 0.12 percent. The benchmark Shanghai Composite Index climbed 2.70 points to 2,324.02 on turnover of 114.3 billion yuan ($18.6 billion).

"Investors withdrew their funds from the financial sector and turned to shares of smaller companies, so trading remained tepid today," Haitong Securities analyst Zhang Qi told AFP.

Aircraft-related companies rose after media reports said the government would support development of unmanned drones.

Jiangxi Hongdu Aviation Industry jumped 6.15 percent to 21.24 yuan while China Avic Electronics rose 1.87 percent to 27.80 yuan.

Carmakers also climbed higher, with Guangzhou Automobile Group rising near its 10 percent daily limit to 10.13 yuan, while Xiamen King Long Motor gained 6.47 percent to 11.02 yuan.

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http://www.globalpost.com/dispatch/news/afp/130529/hong-kong-stocks-end-161-lower