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Hong Kong shares down 1.34% by close

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(Globalpost/GlobalPost)

Hong Kong shares fell 1.34 percent on Tuesday, dragged lower by a sharp fall in HSBC Holdings after the banking giant posted disappointing first-half results.

The benchmark Hang Seng Index lost 298.31 points to 21,923.7 on turnover of HK$49.02 billion (US$6.32 billion).

It was HSBC's biggest one-day decline in more than a year after the bank's first-half revenue fell more than expected and as declining emerging market growth was seen weighing on the global banking giant.

HSBC's report was "not a disaster by any means but (considering) the share price strength before (its) announcement, a correction looks inevitable," Kim Eng investment advisory head Edward Fung told Dow Jones Newswires.

Its shares had risen 13 percent in the six weeks leading up to the report.

The stock easily carries the biggest weighting on the HSI, accounting for 15 percent of the index. Tuesday's declines shaved 170 points off the index.

Shares of Chinese Internet titan Tencent were a bright spot in Hong Kong trade, rising 1.2 percent to HK$375.60 despite the broader market's decline. The technology sector has been a hot trade in the city after Beijing signalled technology as one of the industries it intends to focus on its growth reform.

"If you look at the individual performance, I think this will still be a very polarised market," said Alex Wong, head of asset management at Ample Capital.

China Construction Bank was off 1.22 percent at HK$5.69 while insurance group AIA fell 1.92 percent to HK$35.75.

Chinese shares closed up 0.49 percent. The benchmark Shanghai Composite Index climbed 10.02 points to 2,060.50 on turnover of 88.7 billion yuan ($14.5 billion).

"In the short term, the downside is limited while there's still upward momentum in the market," BOC International analyst Shen Jun told AFP.

Automakers led gains on hopes for solid half-year earnings.

Guangzhou Automobile Group surged 8.42 percent to 8.37 yuan while SAIC Motor gained 5.37 percent to 13.34 yuan.

Media shares were higher, with Zhejiang Daily Media Group jumping 7.10 percent to 31.23 yuan while Jishi Media rising 2.97 percent to 7.97 yuan.

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http://www.globalpost.com/dispatch/news/afp/130806/hong-kong-shares-down-134-close-0