(Updates to midday)
* HSI down 0.9 percent, HSCE down 1.4 percent
* CSI300, Shanghai Comp off 0.6 pct
* Prada, Esprit weak as retailers on backfoot
* BYD shares in HK slump 10 pct on CLSA report
* HKEx down 2.3 pct, erases all gains post-QE3
By Vikram Subhedar
HONG KONG, Sept 26 Hong Kong shares slipped on
Wednesday, hit by profit-taking ahead of the quarter-end and as
weak overseas markets and festering eurozone concerns kept
investors wary of chasing this month's rally.
The Hang Seng index fell 0.9 percent to 20,514.32 by
the midday break, with retailers bearing the brunt of pain.
Esprit Holdings, which reported weaker-than expected
annual results after the end of the morning session, was down
Profit margins in China and Hong Kong are expected to remain
under pressure through the rest of the year with a mild recovery
expected only next year, according to Credit Suisse.
"Any way we slice it, growth trends are sliding," said
Credit Suisse analyst Karim Salamatian, the Hong Kong-based
regional head of Credit Suisse's consumer research team.
The Hang Seng index is, however, still up 5.3 percent so far
The China Enterprises index fell 1.4 percent while
in China, the CSI300 of the top Shanghai and Shenzhen
listings and the Shanghai Composite were both down 0.6
Both Hong Kong and China markets got off on a weak start
after the S&P 500 suffered its worst day since June. Key
to the declines were comments by Philadelphia Federal Reserve
President Charles Plosser that questioned quantitative easing as
a policy to counter sluggish economic growth and stubbornly low
Protests in debt-laden Spain ahead of the planned
announcement of a new round of austerity measures did little to
enthuse investors back into stocks.
In Hong Kong, consumer-related stocks fell on relatively
healthy volumes on an otherwise lacklustre day for trading.
High-end brands, jewelers and apparel makers were all weak
as investors continued to take money off the table after the
strong run-up in stocks this month.
In addition to Esprit, Prada SpA was down 1.4
percent while consumer goods exporter Li & Fung fell a
2.3 percent, extending this week's losses to 4.1 percent.
Hong Kong jewellers, a sector favoured by the brokerage
partly due to low valuations, also fell on Wednesday with Chow
Tai Fook Jewellery Group down 0.7 percent and rival
Luk Fook Holdings off 1 percent.
A pullback in gold prices this week continued to weigh on
mining companies with Zijin Mining off 1.8
percent in Shanghai and down 2.3 percent in Hong Kong.
BYD SLUMPS, HKEx ERASES POST-QE3 GAINS
Shares of Warren Buffett-backed BYD Co Ltd slumped
9 percent in Hong Kong trading after brokerage CLSA slashed its
target price for the electric car maker.
In its report, CLSA maintained its "conviction sell" rating
on the company and cut its target price on the stock to HK$0.41,
suggesting a further 96 percent decline from current levels.
Rival Great Wall Motor, to whom CLSA believes BYD
is losing market share, rose 2.5 percent in Hong Kong and 1.1
percent in Shanghai.
BYD shares had traded nearly two-and-a-half times their
average daily volume by midday in Hong Kong. The company's
Shenzhen listing fell 5 percent.
The drop off in overall market volumes continued to plague
shares of Hong Kong Exchanges & Clearing which fell
2.3 percent and have now erased all gains following the launch
of latest round of asset purchases by the U.S. Fed on Sept 13.
(Editing by Edwina Gibbs)