Stocks drop on Europe debt, China rate concern
Updated: 2010-12-01 07:10
(HK Edition)
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Hong Kong's Hang Seng Index (HSI) fell, as the threat that Europe's debt crisis will spread and expectations the Central Government will raise interest rates overshadowed optimism about US spending.
The HSI fell 0.7 percent to 23,007.99 at the close, dropping 0.4 percent this month. The Hang Seng China Enterprises Index sank 0.6 percent to 12,817.59.
Exporters to Europe declined as Ireland's bailout failed to ease investor concern that Europe's debt crisis may spread. Esprit sank 2.3 percent to HK$37.55, and HSBC dropped 1.4 percent to HK$78.95. Cosco Pacific Ltd retreated 1.4 percent to HK$12.30.
European governments' 85 billion-euro ($111 billion) bailout package for Ireland failed to quell the market turmoil menacing the euro as stocks, bonds and the currency declined.
L'Occitane International SA tumbled 6.1 percent to HK$20.95 even after reporting a 19 percent increase in first-half profit from a year earlier. HSBC Holdings Plc cut its rating on the stock to "neutral" from "overweight."
Banks and developers declined on speculation the Central Government will raise interest rates further to curb inflation. Agricultural Bank lost 1 percent to HK$4.05, while China Construction Bank Corp fell 1 percent to HK$7.01. Industrial & Commercial Bank of China Ltd gained 2 percent in the last minutes of trading. ICBC was included in the MSCI Hong Kong Index at the close of trading Tuesday, according to a report from MSCI. China Resources Land Ltd sank 1.4 percent to HK$13.92, and Guangzhou R&F Properties Co slid 0.4 percent to HK$10.32.
Among stocks that rose, Li & Fung jumped 1.4 percent to HK$48.40, extending Monday's gains after the US-based National Retail Federation said on November 28 that the average shopper in the US spent 6.4 percent more over Thanksgiving weekend than last year. Techtronic Industries Co rose 2.6 percent to HK$8.44. Yue Yuen Industrial Holdings Ltd increased 1.1 percent to HK$28.05.
Eight stocks fell for each three that gained on the 45-member HSI. Futures on the gauge declined 0.8 percent to 23,028.
Bloomberg
(HK Edition 12/01/2010 page3)