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HK realty shares fall on rate concerns

HONG Kong shares shuffled sideways in a skittish session yesterday, taking a breather after the previous session's sharp ascent, as local property stocks were beaten down on worries about rising interest rates.

The benchmark Hang Seng Index finished 5.37 points higher at 18,791.03, after dropping to 18,564.87 earlier.

The China Enterprises Index of top Chinese mainland companies added 0.4 percent to 11,080.84, led by a 2.4 percent jump in China Construction Bank, which has been a laggard in the recent rally.

Turnover shrank to HK$78.4 billion (US$10.1 billion) from HK$83.5 billion on Wednesday.

Local property stocks were beaten down on worries about rising interest rates, which hit Wall Street shares on Wednesday.

"Even though a rate hike in the United States may be two or even three quarters away, it's all about investor expectations, and investors don't like the rising bond yields," said Alex Wong, a director with Ample Finance Group.

Changes in interest rates in Hong Kong take place in tandem with those in the United States, owing to the peg between the local currency and the greenback.

Top developer Sun Hung Kai Properties shed 1.9 percent, while Li Ka-shing's property flagship Cheung Kong dropped 2.7 percent to HK$91.45.

Sino Land slipped 2.5 percent, while Hang Lung Properties fell 4.8 percent.

Bank stocks were also hit with HSBC's local unit, Hang Seng Bank, shrinking 2 percent to HK$113.80.

Sinopec Shanghai Petrochemical jumped 7.3 percent to HK$2.80 after the refiner announced it expected to return to profit in the first half of 2009 as global prices of raw materials dropped following a decline in international crude oil prices.


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