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Hong Kong stocks close 0.18% lower

Islamists protested and clashed with police in the Egyptian city of Alexandria ahead of the start of the trial of deposed president Mohamed Morsi.

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(Globalpost/GlobalPost)

Hong Kong shares sank 0.18 percent Thursday as traders brushed off a record close on Wall Street ahead of a closely watched European Central Bank policy meeting later in the day.

The benchmark Hang Seng Index shed 42.05 points to 23,109.66 on turnover of HK$48.61 billion (US$6.27 billion).

US shares rose after broadly upbeat data, including a surge in activity in the services sector, while the Federal Reserve's "Beige Book" report said all 12 districts of the country saw increasing economic activity in recent weeks.

The S&P 500 rose 0.18 percent to end at another all-time high, the Dow edged up 0.07 percent and the tech-rich Nasdaq gained 0.41 percent.

Investors are now awaiting the release of May's non-farm jobs report out in Washington Friday for a better handle on the economy.

On Thursday the ECB is expected to cut rates to historic lows to fight off anaemic price rises and the threat of deflation. There is also speculation that it could introduce a number of other measures such as lowering the deposit rate to negative levels and begin asset purchases similar to that carried out by the Federal Reserve.

In Hong Kong trade, Cathay Pacific Airways dipped 0.28 percent to HK$14.38, HSBC fell 0.43 percent to HK$80.85, China Mobile gained 0.13 percent to HK$76.30 and Henderson Land Development added 3.59 percent to HK$52.00.

Internet firm Tencent eased 0.73 percent to HK$108.40 and Ping An Insurance of China edged up 0. 83 percent to HK60.40.

In mainland China the benchmark Shanghai Composite Index rose 0.79 percent, or 16.05 points, to 2,040.88 on turnover of 56.4 billion yuan ($9.0 billion). The gains broke a four-day losing streak.

The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 1.33 percent, or 13.87 points, to 1,058.30 on turnover of 81.8 billion yuan.

Investors took heart from the central bank's decision to pump fresh money into the financial system, easing fears over a credit crunch.

"A series of money injections suggest stabilising the growth rate comes before economic restructuring to the central bank," Wang Jing, a senior trader with Goldstate Securities, told Dow Jones Newswires.

China also last week announced it would trim the amount of cash some banks must hold in reserve, in a further loosening of monetary policy aimed at boosting the economy.

But Haitong Securities analyst Zhang Qi told AFP: "We saw a stabilising market today, but the trading volume was still small. The market will need continuous, large amounts of fresh funds to rise out of the current trough.

"Looser monetary policy will help ease worries over the resumption of initial public offerings, but not significantly," he added.

More than 400 companies have announced IPO plans, raising worries of a share glut that could hit prices.

ICBC bank rose 1.68 percent to 3.63 yuan and China Merchants Securities climbed 1.49 percent to 10.19 yuan.

Property firms bounced on bargain hunting. China Vanke added 1.3 percent to 8.31 yuan after easing 2.4 percent on Wednesday, while China Merchants Property Development advanced 2.2 percent to 17.23 yuan after a 3.1 percent drop previously.

dan/mtp

http://www.globalpost.com/dispatch/news/afp/131101/egypt-islamists-launch-protests-ahead-morsi-trial