HONG Kong stocks fell, lowering the benchmark index from a five-week high, on concern slowing global economic growth and rising fuel costs will erode earnings.
China Petroleum & Chemical Corp, Asia's biggest refiner known as Sinopec, declined the most in more than two weeks after saying it is facing "a lot of pressure" because of losses from turning crude oil into fuel products. Cosco Pacific Ltd, Asia's third-largest container-terminal operator, had its biggest drop in more than two weeks after Goldman, Sachs & Co and Deutsche Bank AG cut their ratings on the stock.
"It's pretty much confirmed that the US is in a recession," said William Fong, a fund manager at Baring Asset Management Asia Ltd in Hong Kong, which oversees more than US$10 billion. For refiners, "we're a bit cautious. We try to avoid them."
The Hang Seng Index lost 267.07, or 1.1 percent, to close at 24,311.69. The gauge's 7.6 percent gain in four sessions through Monday lifted it to the highest close since February 28. The Hang Seng China Enterprises Index, a measure of so-called H shares of mainland Chinese companies, declined 1.7 percent to 13,196.22.
State-controlled Sinopec dropped 33 cents, or 4.3 percent, to HK$7.29 (93 US cents), its biggest drop since March 20. The stock was the Hang Seng Index's second-biggest percentage loser.
Sinopec suffered "severe" refining losses in the fourth quarter, Financial Officer Dai Houliang said on Monday.
The Chinese government caps the price of fuels to limit their impact on inflation, which reached 8.7 percent in February, the fastest pace in 11 years. Sinopec, which supplies about two thirds of the fuel in China, wasn't able to pass on higher raw material costs as benchmark New York oil prices jumped 57 percent last year, Bloomberg News said.
Cathay Pacific Airways Ltd, Hong Kong's largest carrier, lost 34 cents, or 2.1 percent, to HK$16, its largest drop since March 27. Fuel accounted for 31 percent of the airline's net operating costs, Chairman Christopher Pratt said last month.
Air China Ltd, the nation's biggest international airline, fell 25 cents, or 3.7 percent, to HK$6.56, its biggest drop since March 27.
The price of jet fuel rose 70 percent in the 12 months through yesterday.