HK shares nosedive 1.94% after rally
Updated: 2008-12-10 07:17
(HK Edition)
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Hong Kong shares yesterday dropped 1.94 percent, with gains in oil and metal stocks offset by a pullback in other blue chips following the previous session's steep rally.
The benchmark Hang Seng Index finished 291.65 points lower at 14,753.22, dragged down by a 4.18 percent fall in heavyweight China Mobile.
Earlier yesterday the index rose more than 1 percent on expectations of bigger and bolder steps by the governments to revive the global economy after US President-elect Barack Obama proposed a massive public works investment and US carmakers inched closer to securing a government bailout.
Worries about poor November economic data from the US and the mainland in the coming days accelerated the market's descent in the afternoon session.
Dodging the downdraft, China's largest shipping conglomerate China COSCO surged 11.78 percent after the Baltic Dry Index, which gauges changes in the prices of shipping commodities, broke its three-week losing streak to gain more than 1 percent overnight.
China Shipping Development followed suit with a 6.22 percent rally while port operator China Merchants Holdings jumped 5.12 percent.
"The outlook is pretty mixed at this point. While the sentiment has improved a bit, the market had gained too much too fast and we are bound to give up another 300-500 points in the near term," said Alex Wong, director of Ample Finance.
"China has yet to announce the big stimulus plan that it is rumored to be working on and investors are getting a bit impatient now. Also, there are worries about more industries lining up for bailouts if the US carmakers are rescued."
Turnover dropped, with shares worth HK$56.9 billion changing hands compared with HK$63.9 billion on Monday.
The China Enterprises Index of top locally listed mainland firms dropped 1.67 percent to 8,001.74.
Commodity-linked stocks led gainers on the main index as oil prices held steady yesterday after surging 7 percent overnight on an equity market rebound and signs of deepening cuts from top supplier Saudi Arabia.
Shares in offshore oil specialist CNOOC jumped 4.42 percent. China Shenhua, the world's most valuable coal miner, gained 4.09 percent while smaller rival China Coal Energy soared 8.86 percent.
Metal stocks also rose on resurgent commodity prices as stimulus measures from governments across the world are seen steadying plunging demand for raw materials.
Reuters
(HK Edition 12/10/2008 page3)