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Wednesday, October 26, 2016, 16:35

Stocks follow Wall Street lower amid investor caution

By Reuters

Hong Kong stocks fell the most in nearly two weeks on Wednesday, with market sentiment dampened by weakness on Wall Street and in mainland.

Investors also remained nervous given the U.S. election next month, the Federal Reserve's policy meeting in December, and over the health of the mainland's economy.

The Hang Seng index fell 1.0 percent, to 23,325.43, while the China Enterprises Index lost 1.4 percent, to 9,698.85 points.

Morgan Stanley said that the mainland 's property boom, and the recent tightening, would have a negative impact on the economy.

"While we are less concerned about a hard-landing scenario in the near term, we believe the recent housing boom has been causing deterioration in the  mainland's structural fault lines," Morgan Stanley wrote.

"This echoes our long-standing view that the mainland's growth trajectory beyond the near term will be weighed down by structural issues."

Nearly all sectors fell, with financial shares leading the decline.

Great Wall Motor tumbled 12 percent on Nomura's downgrade after its third-quarter results.

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