HONG KONG: Hong Kong stocks fell as Chinese retailers and food companies retreated after Premier Wen Jiabao warned the mainland’s labor situation will become more “severe” and property prices fell.
China Resources Enterprise Ltd., a brewer and operator of supermarkets, dropped 2.2% for a 10th decline in 11 days. China Resources Land Ltd., a state-controlled developer, declined 1.1% as new home prices fell in 57 cities out of 70 in June from a year before. Li & Fung Ltd., a supplier to Wal-Mart Stores Inc., gained 1.4% as US Federal Reserve Chairman Ben S. Bernanke said the central bank is looking at ways to boost the world’s-largest economy if the labor market stalls.
The Hang Seng Index dropped 0.4% to 19,362.97 at 9:43 a.m. in Hong Kong, with almost two shares dropping for each that advanced in the 49-member gauge. The Hang Seng China Enterprises Index of mainland companies slipped 0.2% to 9,365.19.
The benchmark Hang Seng Index fell 10% from this year’s high in February through yesterday on signs Europe’s debt crisis is worsening while growth slows in China and the US The drop cut the value of shares on the gauge to 10.2 times estimated earnings on average, compared with 13.1 for the Standard & Poor’s 500 Index and 10.8 for Stoxx Europe 600 Index.
Futures on the Hang Seng Index fell 0.6% to 19,375. The HSI Volatility Index rose 2.8% to 19.46, indicating traders expect a swing of about 5.6% in the benchmark index during the next 30 days. (Bloomberg/T07/aph)
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