HANG SENG SEE-SAWS BACK BELOW 20,000

tauringhuang.

A sharp sell-off in Hong Kong blue chips drove the Hang Seng index back below 20,000 yesterday as investors across the region continued to fret about slowing global growth and the outlook for the financial sector.

The Hong Kong benchmark fell 2.4 per cent to 19,999.78, wiping out nearly all the gains made in the wake of the bail-out of Fannie Mae and Freddie Mac.

Real estate stocks led the market lower, with Agile Property falling 7.4 per cent to HK$4.26, Guangzhou R&F 8.4 per cent to HK$10.26 and China Overseas Land 11.5 per cent lower at HK$10.20.

Overnight weakness for oil and other commodities helped push resources stocks lower, while shipping stocks extended recent losses. Zijin Mining fell 9.3 per cent to HK$3.89 while China Cosco tumbled 13 per cent to HK$10.18.

By contrast, Shanghai edged higher for a second day following some reassuring data on inflation. The Composite index gained 0.2 per cent to 2,150.76.

The headline rate of consumer price inflation slipped to 4.9 per cent year on year in August from 6.3 per cent, the lowest rate since June last year.

Other data showed that the annual rate of producer price inflation edged up to 10.1 per cent in August from 10 per cent in July, while urban fixed-asset investment growth rose slightly.

“The mixed data suggest that policy makers will continue to take a gradual approach in shifting policy focus from inflation to growth,” said Mingchun Sun, economist at Lehman Brothers. Citic Securities led the market higher with a 4.3 per cent rise to Rmb19.15. Sinopec rose 1.1 per cent to Rmb9.09.

Power companies also gained, with Huaneng Power rising 3.2 per cent to Rmb6.52 and Datang Power rising 2 per cent to Rmb7.06.