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HK shares post first weekly loss in 4, property, energy plays weigh

Published 04/15/2011, 04:19 AM
Updated 04/15/2011, 04:24 AM
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HONG KONG, April 15 (Reuters) - Hong Kong shares posted their first weekly loss in a month, led by profit-taking in energy and property counters, where weakness could spill over to next week as lending conditions in the territory tighten up.

The Hang Seng Index ended flat on the day but down 1.6 percent on the week at 24,008.07. The China Enterprises Index fell 0.9 percent on the week, outperforming the broader market and helped by steady gains in Shanghai.

The Shanghai Composite Index finished down up 0.26 percent on Friday at 3,050.53. Its 0.7 percent gain on the week outperformed the MSCI Asia ex-Japan's 1.2 percent drop.

HIGHLIGHTS:

* Turnover on Hong Kong's main stock exchange came in at HK$72 billion, about 12 percent below the average seen over the past month, as investors retreated from making large bets. A rise in short-selling on the iShares FTSE/Xinhua China ETF , which tracks the A-share market, added to the sense of caution heading into next week.

* The sub-index of property stocks in Hong Kong fell 0.57 percent on the day, underperforming the Hang Seng Index, after HSBC Holdings Plc raised mortgage rates for the second time in a month and as valuations became less attractive. Sun Hung Kai Properties Ltd fell 1.3 percent, while China Overseas Land & Investment Ltd dropped 1.1 percent.

* Steel stocks were big underperformers after a profit warning from Angang Steel Co Ltd sent its shares down 5.3 percent, their biggest single-day drop since June last year. Steel companies have seen earnings forecasts downgraded sharply over the past fortnight, although shares have rallied on expectations that demand from Japan will support prices.

WEEK AHEAD:

* Markets will be on high alert for another increase in bank reserve requirements after inflation in March hit its highest level since June 2008.

China will also release its monthly property price index for 70 cities on Monday, which investors will watch closely for signs the government's tightening efforts have helped in curbing price increases. (Reporting Vikram Subhedar; Editing by Chris Lewis)

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