HK shares fall over Europe's debt crisis

Date:2011-11-08liuhongli  Text Size:

HONG Kong stocks fell yesterday amid concern about Europe's debt crisis on signs Italian Prime Minister Silvio Berlusconi will fail to muster a majority for a key vote today.

China Overseas Land & Investment Ltd, a state developer, fell 4.8 percent after Phoenix TV reported Premier Wen Jiabao signaling that property curbs won't be relaxed until home prices drop. CNOOC Ltd, China's leading offshore energy explorer, sank 2.2 percent after a deal to buy Argentina's biggest oil exporter collapsed.

"Equities will continue to be under the pall of very high volatility," Andrew Freris, senior investment strategist for Asia at BNP Paribas Wealth Management, said on Bloomberg Television. Investors should be "out of equities and concentrate on fixed income."

The Hang Seng Index slipped 0.8 percent to 19,677.89, after rising as much as 0.7 percent. The Hang Seng China Enterprises Index of mainland firms listed in Hong Kong shed 0.6 percent to 10,646.75.

Italy's parliament will vote today on the 2010 budget report amid an unraveling of Berlusconi's majority and a surge in the nation's borrowing costs. Greek Prime Minister George Papandreou agreed to step down as a new government is created to secure international financing to avert a collapse of the country's economy. The MSCI Asia Pacific Index lost 0.5 percent, bringing its year-to-date decline to 13 percent.

China Overseas Land slid 4.8 percent to HK$14.28 (US$1.84), the steepest drop on the Hang Seng index. Shimao Property Holdings Ltd lost 4.1 percent to HK$7.50.

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