Oct 19 (Reuters) - Hong Kong stocks fell the most in over two months on Thursday as investors dumped property shares amid signs of tighter liquidity in the city and after data showed property sales in mainland China fell for the first time in over 2-1/2 years.
Sentiment was not aided by news that China’s economic growth eased slightly in the third quarter, with investors scrambling to take profits in recently outperforming sectors such as auto and telecom amid concerns of further slowdown in coming months.
The Hang Seng index fell 1.9 percent, its biggest one-day drop since mid-August, to close at 28,159.09 points.
The China Enterprises Index tumbled 2.3 percent to 11,357.45 in its biggest decline since mid-December.
Nearly all sectors fell, with an index tracking Hong Kong property stocks down 1.9 percent and financials sliding 2 percent.
Linus Yip, Hong Kong-based chief strategist at First Shanghai Securities, said the tumble in property shares triggered broader panic selling.
But he said it was too early to call an end to the Hang Seng’s 28 percent rally so far this year, arguing the 28,000-point level is still seen as strong support.
“Property shares were dumped because of signs of tighter liquidty as Hong Kong braces for another rate hike by the U.S. Federal Reserves,” Yip said, pointing to a recent increase in interbank rates.
Hong Kong’s one-month interbank rate rose to 0.59 percent on Thursday, nearing the eight-month peak hit on Oct 4.
Raw material shares also tumbled, after China data showed the country’s economic growth slowed slightly in the third quarter to 6.8 percent from 6.9 percent in the second quarter.
While the number met economists’ forecasts, comments from country’s central bank governor at the weekend had raised expectations it may be stronger.
Traders focused more intently on property investment data, which showed September sales fell for the first time since early 2015 while construction starts slowed sharply. (Reporting by Samuel Shen and John Ruwitch; Editing by Kim Coghill)