Reuters: Hot Stocks: Hong Kong, China shares fall, heading for weekly loss

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Hong Kong, China shares fall, heading for weekly loss Feb 22nd 2013, 05:43 By Donny Kwok SHANGHAI | Fri Feb 22, 2013 12:43am EST SHANGHAI Feb 22 (Reuters) - Hong Kong shares fell further on Friday, heading for their biggest weekly loss since mid-November, as investors hold back after a rally earlier in the month and before the earnings season begins, traders said. The Hang Seng Index fell as much as more than one percent to its lowest this year before trimming losses to 22,844.66 by lunch break, down 0.27 percent for the day and 2.6 percent for the week. The China Enterprises Index of the top Chinese listings slid 0.16 percent. "The pullback is a healthy correction after the recent rally, and that allowed the market to take a breather before setting off," said Steven Leung, a director at UOB Kay Hian. "Investors are cautiously optimistic on the market and have taken a prudent approach ahead of the release of corporate earnings results," Leung added. The earnings are due out in early March. Shares of footwear retailer Belle International Holdings Ltd . fell a further 3.7 percent after a 16.8 percent slide on Thursday because of a lower-than-expected profit forecast for 2012. The share price is at its since November 21, 2012. Smaller rival Daphne International Holdings Ltd was down 1.1 percent. Cosmetic retailer Bonjour Holdings Ltd rose 7 percent to it highest in four weeks after it posted 29 percent year-on-year growth in retail sales during the Chinese New Year this month with same stores sales growth 38 percent. The stock trimmed gains but was still up 3 percent by lunch break. In Hong Kong, the blue chip property sub-index, which has fallen over 3 percent so far this week on expectations of fresh curbs to rein in home prices, edged up 0.25 percent. China Overseas Land rose 3.7 percent while China Resources Land was up 2.3 percent. MAINLAND MARKETS Mainland markets were flat during the morning session. The China CSI300 was up 0.1 percent at 2,614.4 while the Shanghai Composite Index was down by a negligible 0.02 percent. Investors are still digesting Thursday's plunge, which saw both indices drop over 3 percent, their largest respective intra-day declines since 2011. Mainland markets have steadily retreated from a rally that appears to have peaked in mid-February, with analysts saying a period of "adjustment" is underway as market players digest new developments. Both indexes look set to post steep weekly losses. The SSEC is down over 4 percent, while the CSI300 has sagged 5.6 percent, its sharpest drop since Nov. 2010. Thursday's dive was attributed to a mixture of factors, including signals that the U.S. might wind down monetary stimulus - which has been credited for driving funds into emerging markets - earlier than expected. Other analysts blamed a policy announcement calling for the expansion of the real estate property tax, and an unusually large fund drain executed by the Chinese central bank, which caused some to worry it presaged a new tightening cycle. (Additional reporting by Pete Sweeney; Editing by Sanjeev Miglani) Link this Share this Digg this Email Reprints

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