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HK index falls for third day in a row

HONG Kong stocks yesterday fell for the third straight day, led by exporters and materials companies.

Li & Fung Ltd, the biggest supplier of toys and clothing to Wal-Mart Stores Inc and Target Corp, slumped 7.1 percent. Aluminum Corp of China, seeking approval for a US$19.5-billion investment in Rio Tinto Group, dropped 4.1 percent. CNOOC Ltd, the largest Chinese offshore oil producer, lost 6.6 percent after oil retreated. Hang Seng Bank Ltd, the No. 1 Hong Kong-based bank by market value, dipped 3.2 percent.

"US economic data confirms that things are still accelerating on the downside," Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, said. "You're seeing generalized weakness, where banks are under pressure and commodities have fallen off."

The Hang Seng Index slumped 3.9 percent to close at 12,317.46, in the steepest drop since December 12. The Hang Seng China Enterprise Index, which tracks so-called H-shares, slumped 4.6 percent to 6,582.23.

The Hang Seng Index has lost 14 percent this year, dragging its valuation to 10 times estimated earnings, down from 18.7 times at the beginning of 2008.

Li & Fung fell 7.1 percent to HK$16 (US$2.06), and Esprit Holdings Ltd, Hong Kong's biggest listed clothing retailer, declined 3.4 percent to HK$40.80.

Aluminum Corp of China, or Chinalco, fell 4.1 percent to HK$3.55. The metal dropped 1.6 percent to US$1,342.25 a ton on Friday, and slipped a further 0.9 percent yesterday. Separately, a measure of six primary metals traded in London declined 1.3 percent.

CNOOC shares dived 6.6 percent to HK$6.35. China Petroleum & Chemical Corp, Asia's biggest refiner, dipped 4.9 percent to HK$3.85. China Shenhua Energy Co, China's biggest coal company, slumped 7.4 percent to HK$14.26.

Crude oil for April delivery dropped as much as 3 percent on the New York Mercantile Exchange on concern that energy demand will decline after the United States economy contracted faster than anticipated.

Hang Seng Bank lost 3.2 percent to HK$84.25. The Bank of China Ltd, the nation's No. 3 lender, fell 3.7 percent to HK$2.09. Trading in shares of HSBC Holdings Plc was halted on expectations of measures to increase capital.


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