Hong Kong shares in 5th straight loss, China crawls higher

Thu Apr 18, 2013 5:16am EDT

* HSI and H-share index -0.3 pct; CSI300 +0.3 pct

* HSI closes above 200-day MA, turnover still weak

* China property lifted after March home price data

* Kunlun Energy tests 200-day MA, now down 11 pct in 5 days

By Clement Tan

HONG KONG, April 18 (Reuters) - Hong Kong shares slipped to a fifth-straight loss in lackluster Thursday trade, led by weakness in commodities-related sectors and Apple Inc suppliers that outweighed strength in Chinese property developers.

Mainland Chinese markets eked out slim gains after official data showed March home prices rose. The CSI300 of the leading Shanghai and Shenzhen listings gained 0.3 percent, while the Shanghai Composite Index inched up 0.2 percent.

The Hang Seng Index slipped 0.3 percent to 21,512.5, barely closing above its 200-day moving average at 21,488.2. The China Enterprises Index of the top Chinese listings also lost 0.3 percent.

Other economic data on Thursday showed China's foreign direct investment inflows reversed the longest streak of annual declines in the first quarter, focused more on advanced manufacturing industries and the service sectors.

The fifth straight loss for both Hong Kong indexes came in the fifth-weakest turnover in the year, almost 13 percent below its average in the past month. Shanghai volumes stayed under its 20-day moving average for a thirteenth-straight session.

"Macro is very difficult to call at this point, so I would be more focused on specific sectors with visible drivers," said Francis Cheung, head of Hong Kong-China research at CLSA, a brokerage firm.

But the Chinese property sector is one of Cheung's favoured. He attributes much of the increase in March home prices to a rush to beat the curbs and anticipates a fall in April transactions, which will make for an even better entry point for the sector's stocks.

Average new home prices across China climbed 3.6 percent last month, after a year-on-year increase of 2.1 percent in February, according to Reuters calculations from data released by the National Bureau of Statistics (NBS) on Thursday.

A lackluster first quarter GDP reading earlier this week had eased jitters on the efficacy of home price curbs. Beijing first announced fresh guidelines in early March but doubts are growing about implementation by local governments, given that the property sector is still a big growth driver.

On Thursday, China Overseas Land (COLI) rose 1.6 percent, paring gains after it posted at midday an increase of 15 percent in first quarter operating profit from a year earlier.

The Hong Kong Economic Times, citing an unnamed source on Thursday, said that Chinese Premier Li Keqiang told a meeting last Friday that he prefers to hold off on expansion of the property tax across the country.

Still, a vice-chairman of the China Banking Regulatory Commission was quoted by mainland media as saying that credit risk for the property sector is rising and that the sector will be the focus of the regulator's risk monitoring this year.

More than half of property developers were still suffering from negative cashflow in the first three quarters with an increasing number of mortgage defaults since the third quarter of last year, Wang Zhaoxing reportedly told Financial News.

Chinese automakers also buoyed gains on A-share indexes after Changan Auto posted a 49 percent rise in 2012 profit. Changan climbed 2 percent in Shenzhen, while SAIC Motor rose 1.1 percent in Shanghai.

APPLE SUPPLIERS, COMMODITIES WEAK

Apple Inc suppliers fell after the U.S. tech giant's shares dropped below $400 for the first time since December 2011. An Apple's chip supplier's disappointing revenue forecast fanned fears about weakening demand for the iPhone and iPad as competition intensifies.

In Hong Kong, AAC Tech slid 3.4 percent in its worst daily loss in three months, while Sunny Optical tumbled 3.8 percent to its lowest in three weeks.

Commodities stocks again fell after London copper declined as much as 4 percent to below $7,000 a tonne for the first time since October 2011, sending Shanghai copper limit down.

Jiangxi Copper fell 2.5 percent on the day to deepen losses on the week to 9.5 percent in Hong Kong. In Shanghai, it shed 1.7 percent on the day and is now down 7.5 percent this week.

Kunlun Energy sank 2.5 percent to HK$14.72, its lowest closing level since Oct. 31 and its current 200-day moving average. It has slumped 11 percent in the last five days and a break below this technical level could point at further losses ahead.

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