HK Shares End At Five-Month Low On Europe Debt Concerns
Hong Kong shares fell sharply Friday to close at a five-month low, dragged down by concerns that budget deficits in Europe could slow the global economic recovery.
The Hang Seng Index fell 676.56 points, or 3.3%, to 19,665.08, after trading between 19,655.88 and 19,822.93 during the session. The blue-chip index closed at the lowest level since Sept. 2, when it ended at 19,522.
The index shed 2.3% in the past week.
Turnover totaled HK$77.47 billion, up from HK$61.00 billion Thursday.
Hong Kong shares fell along with other regional markets, weighed down by concerns that Greece's deficit problems will spread to other deficit-heavy economies, potentially forcing a slowdown in the global economic recovery in order to bring budgets under control.
'There are a lot of uncertainties about the situation in Europe and the moves of the U.S. dollar. These are likely to affect sentiment in the equities markets ahead,' said Conita Hung, head of research at Delta Asia Financial Group.
Ernie Hon, a strategist at ICBC International Securities, said the exact bottom is difficult to call, and could be 1,000 points or so away.
'Blue chips would be screaming buy...if the HSI falls to around 18,500,' said Hon, adding that such a level would value the Hong Kong market a tad above 12 times forward earnings, which is an attractive level.
Traders tip the next support level at 19,200.
All 42 blue chips except defensive utility stock HK Electric ended in negative territory.
Esprit fell 4.5% to HK$55.10 on double whammy of heavy European exposure and the sale of 55 million shares by a shareholder, whom media reports say is the company's ex-chairman, Michael Ying.
Oil companies and miners fell on lower commodity and resources prices. Cnooc fell 4% to HK$11.60, PetroChina weakened 5.8% to HK$8.40, Chalco fell 6% to HK$7.40, and China Shenhua shed 4.7% to HK$31.35.
Debutant mainland developer SCE Property ended at HK$2.72, up 4.6% from its initial public offering price of HK$2.60.
