Hang Seng drops on borrowing cost fears
Source: Bloomberg News |
May 4, 2011, Wednesday
|
Print Edition
Print Edition
HONG Kong stocks retreated for a fifth day, the longest stretch since August, after India's central bank raised interest rates more than estimated, spurring concern that higher borrowing costs globally may slow growth.
Foxconn International Holdings Ltd, Li & Fung Ltd and China Merchants Holdings International Co led declines in the Hang Seng Index. China Resources Power Holdings Co jumped 5.3 percent after a unit of the utility said it will develop wind farms in the Inner Mongolia Autonomous Region.
"The rate increase in India just reminds people that rates are going up," said Sandy Mehta, the Hong Kong-based chief investment officer for Value Investment Principals. "Oil prices have continued to be high and interest rates are still rising. Those are the two strong headwinds for the market."
The Hang Seng Index fell 0.4 percent to close at 23,633.25 in Hong Kong, erasing earlier gains of as much as 0.9 percent. The benchmark measure of Hong Kong equities, which was closed on Monday for the Labor Day holiday, slipped 1.7 percent last week. The Hang Seng China Enterprises Index of Chinese companies' H-shares slumped 0.8 percent to 13,106.54.
Foxconn International, the world's largest contract maker of mobile phones, sank 3.9 percent to HK$4.40 for the biggest loss in a month. Taipei-based Hon Hai Precision Industry Co, which owns more than 70 percent of Foxconn, posted a second consecutive quarter of declining profit, missing analysts' estimates.
Li & Fung, the biggest supplier of clothes and toys to retailers including Wal-Mart Stores Inc, fell 3.4 percent to HK$38.35. China Merchants, which invests in ports, dropped 2.1 percent to HK$35.
Foxconn International Holdings Ltd, Li & Fung Ltd and China Merchants Holdings International Co led declines in the Hang Seng Index. China Resources Power Holdings Co jumped 5.3 percent after a unit of the utility said it will develop wind farms in the Inner Mongolia Autonomous Region.
"The rate increase in India just reminds people that rates are going up," said Sandy Mehta, the Hong Kong-based chief investment officer for Value Investment Principals. "Oil prices have continued to be high and interest rates are still rising. Those are the two strong headwinds for the market."
The Hang Seng Index fell 0.4 percent to close at 23,633.25 in Hong Kong, erasing earlier gains of as much as 0.9 percent. The benchmark measure of Hong Kong equities, which was closed on Monday for the Labor Day holiday, slipped 1.7 percent last week. The Hang Seng China Enterprises Index of Chinese companies' H-shares slumped 0.8 percent to 13,106.54.
Foxconn International, the world's largest contract maker of mobile phones, sank 3.9 percent to HK$4.40 for the biggest loss in a month. Taipei-based Hon Hai Precision Industry Co, which owns more than 70 percent of Foxconn, posted a second consecutive quarter of declining profit, missing analysts' estimates.
Li & Fung, the biggest supplier of clothes and toys to retailers including Wal-Mart Stores Inc, fell 3.4 percent to HK$38.35. China Merchants, which invests in ports, dropped 2.1 percent to HK$35.
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