Stocks decline on profit taking
Updated: 2010-10-16 08:48
(HK Edition)
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Hong Kong stocks fell as investors took advantage of the benchmark index's seven straight weekly gains to sell, and after a report on US jobless claims renewed concern over the strength of a global economic recovery.
Stocks are "technically overbought, and the market will have a reasonable correction," said Danny Yan, Hong Kong-based portfolio manager at Taifook Asset Management. "But there's abundant liquidity globally, which means there wouldn't be a problem for the outlook in the next six to 24 months."
The Hang Seng Index (HSI) declined 0.4 percent to close at 23,757.63, paring its gains this week to 3.6 percent. The Hang Seng China Enterprises Index rose 0.3 percent to 13,613.22.
The HSI's 14-day relative strength index of price momentum was at 85 Thursday, above the 70 level considered by some traders as a sell signal. Among the 320 members of the Hang Seng Composite Index, 177 fell while 122 climbed.
Yan said he is selling shares in some retailers whose share prices have rallied, and buying material and commodity stocks.
Belle lost 5.6 percent to HK$14.28 Friday. Cathay Pacific Airways slid 2.7 percent to HK$21.90. Li & Fung slid 0.8 percent to HK$42.
The number of Americans filing claims for jobless benefits unexpectedly climbed by 13,000 to 462,000 last week, the US Labor Department said Thursday.
Value Partners plunged 7.7 percent to HK$5.76, the biggest drop among the 320 members of the Hang Seng Composite Index. The company said it plans to sell as many as 140 million shares at HK$5.68 each to expand into China.
Twenty-two stocks dropped while 21 climbed among the HSI's 45 constituents. Futures on the gauge declined 0.6 percent to 23,738.
Bloomberg
(HK Edition 10/16/2010 page3)