4 Min Read
* China Resource Power tumbles on parent company chair investigation
* Mainland investors cautious after more companies cleared for listings
* H shares down on weak earnings
By Natalie Thomas
BEIJING, April 22 (Reuters) - Hong Kong shares eased on Tuesday, with a sell-off in China Resource Power Holdings Co Ltd and its subsidiaries weighing on index performance after the parent company's chairman was snared in a graft investigation.
Mainland China shares were also down as investors remained on edge after 18 additional companies gained listing approval last night, further stoking fears of funds being diverted from existing companies.
By midday, the Hang Seng Index was down 0.2 percent at 22,707.24 points. The China Enterprises Index of the top Chinese listings in Hong Kong dropped 0.8 percent.
The CSI300 index of the largest Shanghai and Shenzhen A-share listings was down 0.1 percent, while the Shanghai Composite Index was down 0.1 percent at 2,184.11 points.
In Hong Kong, shares in state owned energy giant China Resources Power tumbled 10 percent after Chinese authorities said they were probing the head of its parent group for corruption.
The sell-off spread to the firm's subsidiaries, with China Resources Enterprise Ltd down 4.4 percent and China Resources Land Ltd losing 3.6 percent.
"There are worries that some of the previous acquisitions were not made with a very fair valuation of the assets," said Ben Kwong, chief operating officer of stockbroker KGI Asia in Hong Kong.
"Of course we have no way to verify if this is true or not, but the market is reacting negatively."
Weak earnings were the main drag on H-shares, with Great Wall Motor Co Ltd shedding 8.7 percent after the country's top maker of sport utility vehicles and pick-up trucks posted a steep decline in first-quarter earnings growth.
The firm's mainland listed shares were down 1.4 percent, having already lost 8.6 percent during Friday and Monday trading.
Air China Ltd shares lost 6.1 percent as the company braced itself for a decrease of between 55-65 percent in first-quarter profits.
On the mainland, investors were still wary after the SSEC index shed 1 one percent in the final hour before trade on Wednesday as investors took fright following news that 28 companies had been cleared to list.
"Technically there was a great deal of pressure for a downward adjustment" said Du Changchun, an analyst at Northeast Securities in Shanghai.
"I think overall today is going to be a bit weak, I'm not so optimistic, I don't think there's much space for any increases as we're still in a period of adjustment."
But shares in Shanghai free trade zone related companies performed well after the Shanghai municipal government published new regulations aimed at facilitating commodities trading in the zone.
Shanghai Waigaoqiao Free Trade Zone Development Co Ltd jumped 6.3 percent and Shanghai Lujiazui Finance and Trade Zone Development Co Ltd gained 3.8 percent.
The Hong Kong stock exchange was closed on Friday and Monday for the Easter holiday. (Editing by Kim Coghill)