HONG Kong's main stock index fell for a second day, led by financial companies on concern new US disclosure requirements will expose further subprime losses for Asian banks.
China Merchants Bank Co had its sharpest drop in almost four weeks after a report the bank is renewing a bid for Wing Lung Bank Ltd, which last month said it had written off investments in collateralized debt obligations.
Kerry Properties Ltd fell the most in almost seven weeks on speculation that further gains for property stocks may be limited.
"This requirement is a reminder that the financial crisis and its aftermath have not disappeared," Nerissa Lee, chief investment officer at Iventure Investment Ltd, told Bloomberg News.
"Property stocks have gone up sharply since the bottom in March and some think gains from here will be limited."
The Hang Seng Index fell 160.42, or 0.6 percent, to 25,449.79 at the close of trading in Hong Kong, after sliding 2.5 percent on Wednesday. The measure, which closed yesterday at its lowest since April 23, remains 21 percent higher since March 17, when it closed at a seven-month low.
The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese mainland companies, fell 1.6 percent to 13,886.59.
Gauges of financial and property companies were the two biggest drags among the Hang Seng Composite Index's 11 industry groups.