* HSI -0.6 pct, H-shares -0.8 pct, CSI300 +0.1 pct
* ChiNext penny stocks sink again, but trim early losses
* Profit taking saps Monday's outperformers among financials
* HK property weak after U.S. Treasury yields spike
* China steel buoyed by report of consolidation plans
By Clement Tan
HONG KONG, Dec 3 Hong Kong shares relinquished
their highest levels in more than 31 months early on Tuesday as
investors took profits on a Chinese financial sector that had
been boosted a day earlier by signs that China could resume
initial public listings next year.
The expections that IPOs could resume was bad news for penny
stocks that have hitherto outperformed a moribund A-share market
this year. Having touch record highs on Friday, they fell again
on Tuesday, following a record drop the previous day.
At midday, the CSI300 of the biggest Shanghai and
Shenzhen A-share listings was up 0.1 percent, while the Shanghai
Composite Index slipped 0.1 percent in shrinking volume.
Both indexes are still negative on the year.
The Nasdaq-style ChiNext Composite Index of
mostly technology startups listed in Shenzhen sank 1.6 percent
after sinking by as much as 4.8 percent earlier in the day.
Despite tanking 8.4 percent in a record loss on Monday, it is
still up more than 62 percent on the year.
The Hang Seng Index, which had closed on Monday at
its highest since late April 2011, was down 0.6 percent at
23,898.3 points. The China Enterprises Index of the top
Chinese listings in Hong Kong shed 0.8 percent.
"It's a pull back today for yesterday's top performers, but
it's not a sign of weakness. The timing of China's IPO reforms
was a bit faster than most had expected," said Jackson Wong,
Tanrich Securities' vice-president for equity sales.
"But market sentiment could well change if the ChiNext index
continues to slide like this. It could well spark panic in the
A-share market," Wong added.
Citic Securities fell 4.4 percent from
a record high in Hong Kong, while sliding 2.1 percent in
Shanghai. China's biggest listed brokerage had led gains in the
sector after regulators announced IPO reforms over the weekend,
barely two weeks after Beijing unveiled a bold reform agenda for
the next decade.
Pesistent tight liquidity in the money market in the
mainland remained a nagging concern for investors in the share
Yield-sensitive counters in Hong Kong sank after U.S.
benchmark 10-year Treasury yields hit a one-week
high as solid U.S. manufacturing activity data renewed
speculation that the U.S. Federal Reserve could begin taperings
its mega-stimulus sooner rather than later.
Hong Kong property developer New World Development
and Wharf Holdings each fell 1.5 percent and Link Real
Estate Investment Trust declined 0.9 percent.
Chinese consumer-related counters sank in Hong Kong after
China's official purchasing managers' index (PMI) for the
non-manufacturing sector eased slightly to 56.0 in November from
56.3 in October, the National Bureau of Statistics (NBS) said on
But Datang Power surged 7.6 percent in
Shanghai and 2.6 percent in Hong Kong. Some Chinese cement and
coal counters were again stronger on rebounding physical prices.
Angang Steel rose 1.6 percent in Hong
Kong and 3.1 percent in Shenzhen after the official China
Securities Journal reported that the Ministry of Industry and
Information Technology is taking measures to curb steel
overcapacity, such as encouraging consolidation on a regional
basis and imposing a capacity quota.
The Economic Information Daily, a financial newspaper
controlled by the official Xinhua news agency, reported on
Tuesday that Beijing is likely to set a 2014 economic growth
target of 7 percent when the annual Central Economic Working
Conference is held later this month.