Hong Kong Stocks Decline 1.5%

123jump.com Staff
14 Jan, 2008
New York City

Asian markets fell across the region led by a sharp decline in Hong Kong stocks. Hang Seng index lost 1.5% or 399 to close at 26,468.13. China sets a preliminary 2008 growth target of 8% and inflation target of 4.6%. China Mobile fell after the company and Apple could agree on revenue sharing agreement between the two. Retailer Espirit in Hong Kong fell 5% after a weakness in in retail stocks in the U.S.

[R]6:00AM New York, 6:00PM Hong Kong – Honk Kong Stocks fell after tracking the losses in the U.S. markets on Friday.[/R]

Stocks in Hong Kong closed lower after American Express and Capital One increased reserves and several retailers reported lower than estimated same sales growth during the holiday period.

The benchmark Hang Seng Index dropped 1.48% or 398.88 at 26,468.13, while the China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, plunged 2.23% at 15,480.10.

Daily turnover on main-board was HK$109.7 billion compared to HK$128.7 billion on January 11.

Dow Jones Newswires reported director-general of fiscal finance at the National Development and Reform Commission Xu Lin said China has set a preliminary target of 8% for economic growth this year, adding that government is also planning to keep increases in consumer price index at 4.6%.

Final targets will be announced at the National People’s Congress meeting in March. China recorded CPI inflation of about 5% in 2007.

Bloomberg news reported today that China’s Vice Finance Minister Li Yong said yesterday in Beijing that the government plans efficiently to coordinate fiscal and monetary policies this year to improve trade surplus and mop up excess liquidity.

China’s government is trying to cool economic growth that soared 11% last year. Trade surplus narrowed to $22.7 billion in December from $26.2 billion in November but the annual trade surplus surged 48% in 2007 to $262 billion.

The Standards news reported today that Invesco chief economist John Greenwood said yesterday that currency appreciation is not an effective measure to alleviate inflationary pressure in the long-term as it will invite more speculation activity.

Property companies rose on increased speculation that the U.S. will cut its benchmark interest rate after American Express Company and Tiffany & Company lowered earnings forecasts.

The city''s bourse operator Hong Kong Exchanges fell 6.1% on a sell-off sparked by investor fears of a weakening market.

Shipping lines fell after the Dry Baltic Index, which gauges freight charges, fell to a 10- month low by 4.6% last week. China COSCO slumped 8.3% to HK$20.45, Pacific Basin declined 6.84% to HK$9.95 and Sinotrans Shipping HK edged lower 5.28% to HK$5.38.

However, Xiamen Port climbed 16.2% to HK$2.51 after the Nationalist Party''s win in Taiwan elections boosted prospects of growing trade between China and Taiwan.

China Mobile fell after the company’s Hong Kong based spokeswoman Rainie Lei said that the company has discontinued talks with Apple Incorporated to launch the iPhones in China.

According to Sina.com Web site, the talks fell apart after Apple demanded 20% to 30% of the fees to provide data services to iPhone users. China Mobile slipped 2.76% to HK$130.20 on the news. China Unicom fell 3.43% to HK$18.04.

Foxconn posted the biggest decline among blue chip stocks plummeting 6.13% to HK$14.08.

Energy stocks also declined after crude oil prices for February delivery fell 1.1% to $92.69. Sinopec Corp shed 4.77% to HK$9.98 at the close of trade.

Retailer Esprit Holdings closed down 5.26% to HK$90.95 on fears that a declining consumer spending in the U.S. will hurt earnings.