Hong Kong shares end 0.31% lower
The benchmark Hang Seng Index (HSI) eased 86.59 points to 27,653.12. Turnover was HK$214.52 billion ($27.68 billion).
The southern Chinese city followed most other regional indexes lower on profit-taking and after losses on Wall Street, where investors were disappointed by another batch of weak US indicators.
The Dow dipped 0.04 percent, the S&P 500 edged down 0.08 percent and the Nasdaq eased 0.06 percent after a report showing housing starts rose less than expected in March, while initial jobless claims hit a six-week high.
Hong Kong’s retreat, however, comes after a rally of about 14 percent since the start of the month after Chinese authorities allowed more mainland fund managers to trade in the southern city using a link-up with the Shanghai exchange.
The news has seen investors north of the border flood the HSI looking for cheaper equities after a surge in Shanghai over the past year that has seen it double in value.
Both bourses have been carried by expectations Beijing will announce further monetary easing to kickstart growth, on top of the two interest rate hikes since November.
HSBC rose 0.21 percent to HK$70.55, Tencent eased 0.75 percent to HK$158.80 and Hong Kong Exchange and Clearing dipped 0.98 percent to HK$283.60 while conglomerate CKH Holdings lost 0.36 percent to HK$164.50.
In mainland China the benchmark Shanghai Composite Index jumped 2.20 percent, or 92.47 points, to 4,287.30 on turnover of 915.6 billion yuan ($147.8 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, edged up 0.48 percent, or 10.12 points, to 2,136.27 on turnover of 588.5 billion yuan.
Expectations are high that Beijing will relax monetary policy further after the Chinese economy expanded 7.0 percent year-on-year in the January-March period, the worst growth for a single quarter in six years.
Analysts said dealers are also looking to the stock market for better returns than other assets.
“Other investment products, such as property and the real economy, are not very good” in the returns they offer, Zhang Qi, a Shanghai-based analyst with Haitong Securities, told AFP.
He warned bubbles were accumulating in the market, but added that the government was unlikely to move to burst them soon.
“Authorities want the healthy development of the stock market because it will to some extent help the real economy,” Zhang said. “Increasing the ratio of direct financing has always been the government’s strategy as it doesn’t want to place all the pressures on bank financing.”
Airlines were among the biggest gainers on Friday. Budget carrier Spring Airlines jumped 10 percent to 98.59 yuan in Shanghai, while China Southern increased 8.52 percent to 9.94 yuan.
Engineering firms and shipbuilders led the rise on Friday, with China CSSC Holdings up by its 10 percent limit to 54.22 yuan in Shanghai and Offshore Oil Engineering climbing 9.99 percent to 15.30 yuan.