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Thursday, October 27, 2016, 16:40

Stocks end weaker after mainland's industrial profits slow

By Reuters

Hong Kong shares fell on Thursday as investors were spooked by an unexpectedly sharp drop in the mainland's industrial profits.

The Hang Seng index fell 0.8 percent, to 23,132.35, while the China Enterprises Index lost 0.9 percent, to 9,608.91 points.

Investor confidence in mainland's economic recovery was shaken by fresh data showing profits in mainland's industrial firms grew 7.7 percent in September, slowing sharply from the previous month's 19.5 percent pace as several sectors were affected by weak activity.

Profits in industries such as electronics, steel and electricity were hit by a significant drop in growth, reinforcing suspicions that recent economic stability was the result of government stimulus and could be short-lived.

Further hurting sentiment, the mainland's offshore yuan slipped to fresh six-year low on Thursday after the People's Bank of China set a weaker midpoint.

Most sectors were down, led by energy stocks. The mainland's CNOOC fell to a week low after it reported a 15-percent drop in Q3 revenue, pushing lower the shares in the other two oil giants Sinopec and PetroChina, while profit-taking in coal stocks after recent strong gains dragged on the sector.

Great Wall Motor shed 4.3 pct, tumbling as much as 16.5 percent in two straight sessions as HSBC and Nomura cut its ratings after it reported Q3 results.

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