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Thursday, November 24, 2016, 16:27

Builders pace Hong Kong stocks’ biggest fall in a week

By Bloomberg
Builders pace Hong Kong stocks’ biggest fall in a week
The fountain sculpture outside Exchange Square in Central seen being refurbished on Thursday. The Hang Seng Index has fallen more than 6 percent since its peak in September, as inflows from the Chinese mainland dwindled and amid expectations the US Federal Reserve will raise interest rates next month. (Edmond Tang / China Daily)

Hong Kong stocks dropped, with the benchmark index capping its biggest decline in more than a week on Thursday, as property companies slid. Insurers climbed after Goldman Sachs Group Inc raised their target prices.

The Hang Seng Index (HSI) lost 0.3 percent at the close. Half of the 10 biggest decliners on the gauge were local developers, with Hang Lung Properties Ltd tumbling 1.3 percent. China Life Insurance Co rose to its highest since January after Goldman Sachs added the company to its conviction list and raised its target price by 16 percent. Huabao International Holdings Ltd surged the most since October last year after saying its chairwoman offered to buy shares.

The Hang Seng China Enterprises Index rose 0.1 percent after sliding as much as 1.1 percent.

The HSI has fallen more than 6 percent since its September peak, as inflows from the mainland dwindled and amid expectations the US Federal Reserve will raise interest rates next month. With the Hong Kong dollar pegged to the greenback, borrowing costs track those of the US.

“Property stocks are still pricing in” the expectation of an interest-rate hike in the US, said Sam Chi Yung, senior strategist at South China Financial Holdings Ltd in Hong Kong. “Hong Kong would follow that, which would be negative for interest rate sectors. Market sentiment isn’t too good.”

The HSI dropped to 22,608.49, while the Hang Seng China Enterprises Index rose for a fifth day. The Shanghai Composite Index was little changed at 3,241.74.

China Life gained the most on the HSI, while New China Life Insurance Co and PICC Property & Casualty Co also rose after Goldman Sachs increased their target prices.

Jiangxi Copper Co climbed 2.8 percent in Shanghai as the price of the metal headed for its biggest monthly gain in more than a decade on perceptions global demand is improving.

Jiangxi Ganneng Co suspended trading in Shenzhen because of a “major issue” that could impact its share price, the company said.

Xinhua News Agency reported that a construction accident at one of the company’s power plants killed more than 40 people. The shares were down 3.7 percent before trading was halted.

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