* HSI slips 0.1 pct on the day, down 0.1 pct on the week
* CSI300 down 0.4 pct on Friday, down 0.9 pct this week
* AIA climbs, China railway counters suffer stiff weekly
losses in HK
* Moutai at lowest close in a year after 2012 profit
By Clement Tan
HONG KONG, Jan 25 Hong Kong and China shares
fell to their lowest in more than a week on Friday as investors
took profit on outperformers after a strong start to the year
faltered on the charts as profit warnings trickled in ahead of
the corporate earnings season.
Laggard counters that trailed the rally from lows late last
year rose this week as investors took profit on the Chinese
financial and railway sectors. Technology stocks also suffered
from Apple Inc's underwhelming earnings.
The Hang Seng Index slipped 0.1 percent on Friday to
23,580.4. It had closed at a 20-month high on Tuesday, but
failed to close above chart resistance at about 23,708, the peak
on May 31, 2011. The benchmark lost 0.1 percent this week.
The China Enterprises Index of the top Chinese
listings in Hong Kong shed 0.8 percent on the day and 0.9
percent on the week. Bourse turnover in Hong Kong was at its
highest on Friday in two weeks.
In the mainland, the CSI300 of the top Shanghai
and Shenzhen A-share listings closed down 0.4 percent at
2,571.7. The Shanghai Composite Index shed 0.5 percent
in bourse volumes that was 43 percent lower than Thursday's.
They slid 0.9 and 1.1 percent this week, respectively, after
a sharp intra-day reversal on Thursday left both onshore indexes
vulnerable technically to more losses in the near term. All four
indexes closed on Friday at their lowest since Jan. 17.
"The strong rally from lows (in Hong Kong) has been largely
driven by liquidity inflows. There is no deep conviction in this
rebound," David Cui, Bank of America-Merril Lynch's China equity
strategist said at a media briefing in Hong Kong.
Cui added that with corporate earnings expected to
disappoint, further index gains will likely rely on a change in
risk perception towards China. At least 28 companies listed in
Hong Kong posted profit warnings this week so far.
China Life Insurance dived 3 percent in
Hong Kong and 3.2 percent in Shanghai. Losses on Friday prodded
its Hong Kong shares below a range it had been bound for most of
January, suggesting further losses could be in store.
China Railway Group (CRG) and China
Railway Construction (CRC) snapped a six-day
losing streak in Hong Kong on Friday, rebounding 1.2 and 0.5
But CRG lost 6.3 percent this week, its worst weekly showing
since May and CRC suffered its worst weekly loss in 14 months,
diving 9.9 percent. Both stocks had been stellar outperformers
in 2012, surging 86 and 106 percent, respectively.
Investors rolled into laggards such as Asian insurance giant
AIA Group, which on Friday rose 0.3 percent to its
highest close since Jan. 4, attracted to the safety of its
earnings growth in a week littered with profit warnings.
There were also gains for Hong Kong property developers this
week, although some sector names are now at their most
technically overbought levels in years after closing at all-time
New World Development inched up 0.1 percent to
another record closing high. Its win in a tender for a railway
property project in Hong Kong on Wednesday and a Citi upgrade on
Thursday helped New World to a near 5 percent gain this week.
But its relative strength index (RSI) value is at most
overbought level since August 2003.
CHINA TELCOS, SPORTSWEAR WEAK
Shares of China Unicom, the country's
second-largest mobile operator, dived 3.5 percent to its lowest
in a month after official Chinese media reported government data
that could suggest an increasingly saturated market.
China's Ministry of Industry and Information Technology said
the number of mobile phone users hit 1.1 billion at the end of
2012. That also put shares of China Mobile and China
Telecom under pressure.
They each fell 1.2 and 1.4 percent, respectively, adding to
losses on Thursday after JP Morgan downgraded its price target
for China Mobile and Apple Inc's disappointing earnings hit
Unicom, the country's major iPhone carrier.
Chinese sportswear brand Li Ning posted its worst
single day loss since July 2011, slumping 14.7 percent after the
company said it would issue up to $241 million in convertible
securities to fund its restructuring.
Before Friday, Li Ning had risen almost 69 percent from a
Sept. 5 low, far outpacing the 23 percent jump on the Hang Seng
Index, despite lingering inventory issues.
In Shanghai, Kweichow Moutai fell 3.5 percent to
its lowest closing level in a year after advising late on
Thursday that its 2012 profit rose by a smaller-than-expected
Shares of the producer of premium white spirits, which
Chinese people often offer as gifts, has been hard hit by
escalating anti-corruption calls from Chinese leaders and a
contamination scare that has worsened overproduction issues.