* HSI -1.5 pct, H-shares -1.1 pct, CSI300 -1.0 pct
* PMI contraction triggers across-board HK selloff
* Mainland and Hong Kong property down on Vanke comments
By Natalie Thomas
BEIJING, May 5 Hong Kong shares were down
sharply on Monday after a private survey showed mainland
manufacturing contracting for a fourth straight month,
triggering a selloff across the board.
Mainland shares also fell, with property counters an added
drag after leaked comments from a top real estate executive
spread pessimism in the industry, though overall losses were
partly mitigated by gains in rail stocks.
By midday, the Hang Seng Index was down 1.5 percent
at 21,917.39 points. The China Enterprises Index of the
top Chinese listings in Hong Kong dropped 1.1 percent.
The CSI300 index of the largest Shanghai and
Shenzhen A-share listings was down 1.0 percent, while the
Shanghai Composite Index was down 0.7 percent at 2011.54
The HSBC/Markit purchasing managers' index (PMI) for April
came in at 48.1 on Monday, lower than a preliminary reading of
48.3, though was up slightly from an eight-month low of 48.0 in
"From a technical point of view Hong Kong is still in a
correction mode," said Jackson Wong, Tanrich Securities'
vice-president for equity sales.
He added that while last week the index had managed to stave
off major losses, the fact that the PMI numbers came in below
expectations meant a selloff was unavoidable.
"This week I would say around 21,500 would provide pretty
good support. However, the technicals are still very negative."
Property stocks took a heavy hit on both exchanges, after
private comments made by a top executive from the mainland's
largest listed developer showing scant optimism for the health
of the sector were leaked to the press over the holiday weekend.
Speaking at a dinner, Mao Daqing, Vice-chairman of China
Vanke Co Ltd, compared China's current situation to that of
Japan and Hong Kong right before their property bubbles burst.
Investor nerves were not helped by Chinese media reports on
Monday that 32.5 percent fewer houses were sold during the long
weekend in China's 54 major cities compared with a year ago.
The CSI300 real estate index was down 2.1
percent, with Vanke losing 1.7 percent and Poly Real Estate
Group Co Ltd down 3.4 percent.
Losses were similar in Hong Kong, Cheung Kong Holdings Ltd
slid 2.5 percent, while Wharf Holdings Ltd
dropped 4.1 percent.
One of the few bright spots came from mainland-listed rail
shares, which gained on reports last week that the country's
2014 railway investment would be increased to 800 billion yuan
($128 billion) from 720 billion yuan.
China Railway Group Ltd gained 2.8 percent,
China Railway Erju Co Ltd was up 2.2 and China
Railway Construction Corp Ltd jumped 2.1 percent.
($1 = 6.2593 Chinese Yuan)
(Editing by Eric Meijer)