Hong Kong shares fall almost 2%

Reported by AAP
Monday, April 23, 2012
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Hong Kong shares have fallen almost two per cent after figures showed China's manufacturing activity was still slowing.

The Hang Seng Index closed down 386.25 points or 1.84 per cent at 20,624.39 on Monday on turnover of HK$43.60 billion ($A5.43 billion).

Chinese shares closed down 0.76 per cent. The benchmark Shanghai Composite Index, which covers both A and B shares, ended down 18.27 points to 2,388.59 on turnover of 109.4 billion yuan ($A16.83 billion).

Chinese manufacturing activity remained in contraction for the sixth straight month in April, figures showed, with the HSBC purchasing managers index (PMI) standing at 49.1 in April, the British banking giant said.

The figure was an increase from the 48.3 seen in March but a reading below 50 suggests contraction while a reading above 50 indicates expansion.

"Despite a mild improvement in April PMI, the reading is still in contraction, so it does not indicate a recovery in the domestic economy," Shen Jun, an analyst at BOC International, told AFP.

Chinese wireless operator China Mobile led the Hong Kong fallers, dropping 3.03 per cent to HK$84.80 on profit-taking, while financials also fell with China Construction Bank down 2.63 per cent to HK$5.92 and ICBC off 2.46 per cent at HK$5.15. Property developer Cheung Kong fell 2.8 per cent to HK$99.05.

China said earlier this month its economy grew by 8.1 per cent in the first quarter of this year, its slowest pace in nearly three years, piling pressure on Beijing to loosen its monetary policy.

In Shanghai metals shares were lower after gains in previous sessions.

Western Resources dropped 4.12 per cent to 19.3 yuan, Jiangxi Copper fell 1.33 per cent to 25.26 yuan and aluminium producer Chalco ended down 1.00 per cent to 6.93 yuan.

Shares of brokerages also fell as investors took profits.

Everbright Securities lost 3.13 per cent to 13.62 yuan, while Citic Securities closed down 2.81 per cent to 13.12 yuan.

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