* HSI -1.2 pct, H-shares -1.1 pct, CSI300 -0.5 pct
* Tencent has biggest fall in over a month after U.S. tech
* Chinese banks weaker despite Temasek comment
* Luye Pharma jumps on HK debut
(Updates to midday)
By Grace Li
HONG KONG, July 9 Hong Kong shares fell on
Wednesday after U.S. stocks skidded, with Internet giant Tencent
the biggest drag, while Chinese markets were knocked
off three-week highs as banks fell.
China's consumer price inflation cooled slightly more than
expected in June, pointing to lingering weakness in the economy,
which could prompt Beijing to launch further stimulus measures
to shore up growth.
By midday the Hang Seng Index had fallen 1.2 percent
to 23,248.43, after ending the previous four sessions with
movements of less than 0.1 percent. The China Enterprises Index
of the top Chinese listings in Hong Kong fell 1.1
The CSI300 of the leading Shanghai and Shenzhen
A-share listings was off 0.5 percent, while the Shanghai
Composite Index was down 0.4 percent at 2,056.89. Both
closed at their highest since mid-June on Tuesday.
"We have seen some selling in Wall Street ahead of the
reporting season. That has spread out the sentiment towards Hong
Kong," said Alex Wong, director of asset management at Ample
Wednesday's decline, which pushed Hong Kong's benchmark
index decisively off seven-month highs, was "just a correction
to an overstretched rally", Wong added.
Tencent sank 2.6 percent, its worst daily drop since May 29,
tracking losses in Internet names on the Nasdaq overnight. HSBC
Holdings PLC, the second-biggest drag on the index
after Tencent, slid 1.1 percent.
Chinese banks were also big underperformers. Bank of China
shed 2.0 percent in Hong Kong and 0.8
percent in Shanghai. Smaller lender China Minsheng Bank
lost 1.0 percent in Hong Kong and 0.8
percent in Shanghai.
On Tuesday, Singapore sovereign investor Temasek Holdings
Pte Ltd said it would keep investing in Chinese banks
even though it reported a slowdown in portfolio growth due to a
drop in the value of some of its bank holdings.
Temasek owns a 6 percent stake in China Construction Bank
(CCB) and a 2 percent stake in Industrial and
Commercial Bank of China.
CCB's H-shares slipped 0.9 percent to a 1-1/2-month low.
Daiwa Capital Markets downgraded the stock by two notches from
"buy" to "hold" on Monday, citing property exposure as a big
Bucking the trend was Luye Pharma Group, whose
shares jumped 11.3 percent on its Hong Kong debut, boosting
prospects for other so-called "China orphan" firms that were
delisted by private equity firms from overseas bourses to relist
closer to home, where demand for Chinese firms is seen as more
(Editing by Alan Raybould)