| HONG KONG, March 20
HONG KONG, March 20 A Hong Kong stock market
index tracking mainland enterprises has fallen more than 20
percent since the start of December, far outpacing a drop in the
broader benchmark and signaling that investors are worried about
the outlook for the Chinese economy.
The index's drop comes at a time when recent disappointing
economic data has fueled concerns China will find it difficult
to achieve its 2014 growth target of 7.5 percent.
On Thursday, Hong Kong-listed stocks were hurt by the signal
overnight from the U.S. Federal Reserve that it was ready to
raise interest rates sooner than expected. In recent years,
risky assets such as equities have benefited from the Fed's
heavy asset-buying -- now getting steadily reduced -- and low
global interest rates.
The China Enterprises Index of the top Chinese
listings in Hong Kong fell 1.7 percent on Thursday and is off
20.3 percent from a Dec. 2 high. The index, the easiest way to
bet on mainland enterprises, has suffered the brunt of a selloff
in recent days.
The broader Hang Seng Index tumbled 1.8 percent on
Thursday to 21,182.16, its lowest close since July 10. It was
hurt by the Fed news and disappointing 2013 earnings from China
Mobile, the world's largest carrier by subscribers.
Since Dec. 2, the Hong Kong benchmark has fallen 11.9
percent, about half of the HSCE's drop.
Ben Kwong, chief operating officer of stockbroker KGI Asia,
said weakness for China-related stocks "may drag on for a period
of time until there are signs that the government will do
something such as introducing a stimulus package or maybe the
monetary policy will change."
On Thursday, Premier Li Keqiang said China will speed up
investment and construction plans to ensure domestic demand
expands at a stable rate - an indication authorities are
considering practical measures to support slackening economic
In Hong Kong, China Mobile dropped 3.6 percent to its lowest
close since April 2009 after the reporting its first annual
profit fall in 14 years. Profit in 2013 was down 5.9 percent to
121.8 billion yuan ($19.66 billion), below analyst estimates.
Stocks aren't the only assets to be suffering at present.
The yuan fell to more than one-year lows after the central bank
widened its trading band over the weekend while high-yield bonds
from China's property sector were caught in the selloff.
($1 = 6.1965 Chinese Yuan)
(Editing by Richard Borsuk)