* HSI -0.5 pct, H-shares -0.9 pct, CSI300 flat
* China steel, shipping sectors hit by profit warnings
* China Unicom, Datang Power issue positive earnings alerts
* Hengdeli falls again after negative media report
By Clement Tan
HONG KONG, Jan 31 Hong Kong shares slipped from
a 21-month high on Thursday, as investors turned cautious
following a batch of profit warnings, knocking the Hang Seng
Index off its most overbought levels in almost a month.
The Chinese steel and shipping sectors dominated the more
than 10 profit warnings posted by Hong Kong-listed companies
overnight, while mainland property developers slid after local
media reported the Beijing city government submitted a property
tax plan to the State Council for approval.
In the mainland, the Shanghai Composite Index inched
up 0.1 percent, while the CSI300 of the top Shanghai
and Shenzhen A-share listings was flat. Shanghai volume at
midday stayed relatively robust.
The Hang Seng Index went into the midday trading
break down 0.5 percent at 23,698.2, off Wednesday's 21-month
closing high and back into the trading range that has bounded
the benchmark since mid-January.
Losses on the day pulled the Hang Seng Index down from its
most overbought relative strength index (RSI) value since the
start of the year. The China Enterprises Index of the
top Chinese listings in Hong Kong shed 0.9 percent.
"We ran a little ahead of ourselves in Hong Kong yesterday,"
said Alex Wong, director of asset management at Ample Finance.
"At this point, investors are opting for earnings safety, so
it's not helping shipping and steel names."
Shares of Angang Steel dived 3.5
percent in Hong Kong and 2.9 percent in Shenzhen to their
lowest in a month after it estimated net 2012 losses at 4.2
billion yuan and warned its A-shares could be delisted following
two straight annual losses.
Maanshan Iron and Steel plunged 5
percent in Hong Kong and 1.4 percent in Shanghai after warning
of a record loss in 2012, while Metallurgical Corporation of
China shed 2.9 percent in Hong Kong and 2.3
percent in Shanghai after warning of a 2012 net loss.
Aggravating jitters about steel, the China Iron and Steel
Association (CISA) said on Thursday that 2012 profits reported
by its members, which include more than 70 large steel mills,
slumped 98 percent to 1.6 billion yuan ($257.2 million).
China Shipping Development Co Ltd
tumbled 4 percent in Hong Kong after it warned of a sharp fall
in 2012 net profit. Its larger bulk shipping rival China Cosco
warned of a net loss earlier this week.
But in a rare positive earnings alert, Datang International
Power rose 6.3 percent in Hong Kong and 2.2
percent in Shanghai after saying it expects 2012 net profit to
more than double from the previous year.
Shares of China Unicom were also stronger, gaining
2.1 percent after the company said it expects 2012 net profit to
rise more than 50 percent from a year earlier.
China Vanke fell 3.2 percent in Shenzhen, while
Poly Real Estate tumbled 4.3 percent in Shanghai on
fears that the imposition of property taxes in Beijing, one of
China's largest cities, will hurt demand.
Rising home prices have elevated fears of more curbs on the
sector, but Chinese property shares jumped on Wednesday as
investors welcomed a domestic news report that the central
government could tolerate up to 10 percent increases in home
Hengdeli, China's top luxury watch distributor,
fell a further 3.7 percent on Thursday despite a company
statement reiterating no material changes in its business
operations. On Wednesday, the stock plunged 13 percent
following a report in Hong Kong-based Next magazine raising
questions about its operations.