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Hong Kong stock index drops 1.1 percent as traders sell property firms

Hong Kong stock index drops 1.1 percent as traders sell property firms

Hong Kong shares dropped Friday as traders sold local property companies after the sector posted strong gains over the last four sessions. Worries over the U.S. economy also resurfaced to drag on the market.
The blue-chip Hang Seng Index fell 260.02 points, or 1.1 percent, to 24,331.67.
"Sentiment is cautious and I would expect the index to find support at 22,000 in the near term, given a rising risk of U.S. stagflation and an uncertain outlook over U.S. and regional bourses," Ernie Hon, an analyst from ICEA Securities, said.
When stagflation is present, the economy remains weak as inflation accelerates.
Sino Land slid 4.6 percent to HK$19.98, Henderson Land declined 3 percent to HK$61.90 and Sun Hung Kai Properties fell 2.1 percent to HK$139.00. Property shares had been rising the past few session on expectations of further interest rate cuts to shore up the U.S. economy. Hong Kong's monetary authority usually follow rate moves in the U.S. because of the local currency's peg to the greenback.
Traders said the market will likely be cautious Monday ahead of bank HSBC's results, which are scheduled to be disclosed after the market closes. HSBC fell 1.9 percent to HK$120.70.
"The overhang on (HSBC's) impairment losses and provisions against its sub-prime investments may keep investors cautious," said Castor Pang, an analyst at Sun Hung Kai Financial.
Lenovo fell 3.2 percent to HK$5.40 after IBM sold US$80.6 million (euro53.3 million) worth of shares in the company, trimming its stake to 7.5 percent from 8.8 percent.
Mirabell, a footwear maker and retailer, rose 12.5 percent to HK$5.86 after its bigger rival Belle International offered to take over the company for up to HK$1.67 billion (US$215 million; euro141 million). Belle surged 4.1 percent to HK$9.58.


Updated : 2021-06-18 04:33 GMT+08:00