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HK stocks decrease over US job worries

HONG Kong shares dropped on their first trading day of the third quarter, shedding early gains as the mood in the market swung from optimism over upbeat manufacturing data to caution ahead of key United States job data.

Defying the slump in the broad market, Chinese mainland insurers jumped yesterday as the surging Shanghai Composite Index raised hopes for strong investment income at insurance companies in 2009 after last year's market meltdown.

China's second-biggest insurance company, Ping An, climbed 3.3 percent in Hong Kong.

The benchmark Hang Seng Index finished down 200.68 points at 18,178.05 after starting the day at 18,780.96 only to reverse course in the afternoon.

Turnover picked up pace, rising to HK$68.4 billion from Tuesday's HK$65.1 billion but worries persisted about the lack of momentum on the market.

"There is concern that turnover in the second half will measure up to that in the last few months. There are very few investors interested in buying when the market is hovering around 19,000 points," said Castor Pang, strategist with Sun Hung Kai Financial.

Blue chips pulled back with Britain's biggest bank and local index bellwether HSBC Holdings sliding 2.6 percent after a weak start on the European markets.

Property stocks, which actively participated in the main index's over 35 percent surge in the second quarter, retreated, with conglomerate Swire Pacific giving up 6.6 percent.

The China Enterprises Index, which represents top locally listed mainland stocks, inched up 0.1 percent to 10,971.89.

KWG Property dropped after it said it would sell 300 million new shares, or 10.37 percent of its enlarged share capital, to its controlling shareholder at an 8.6 percent discount to the closing price of HK$5.58 on June 29.

Mainland toll road company Sichuan Expressway Co jumped 9.7 percent to HK$3.51 in Hong Kong following reports that regulators have given it the green light for an initial public offering in Shanghai. Funds raised will likely help finance a 7.5 billion yuan (US$1.1 billion) project to build and operate a 105-kilometer highway from Chengdu to Meishan, local media reports said.


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