HONG KONG |
HONG KONG (Reuters) - Hong Kong and China shares dropped on Wednesday, tracking broader weakness in Asian markets with investors spooked by renewed fears of a Greek exit from the euro zone.
Europe's largest bank, HSBC Holdings (0005.HK) slipped another 1.1 percent to near its lowest since January 19. That brought its losses in May to more than 11 percent - on course for the worst month since an 18-percent slump last November.
The benchmark Hang Seng Index .HSI closed down 1.6 percent at midday, while the China Enterprises Index .HSCE of the top Chinese listings in Hong Kong lost 1.8 percent.
In the mainland, the CSI300 Index .CSI300 shed 0.6 percent and the Shanghai Composite Index .SSEC fell 0.5 percent.
"I'm not panicking ... (but) I won't be betting on a change in the direction of the market in the near term," said Hong Hao, chief strategist at Bank of Communications International Securities.
All 48 components of the Hang Seng Index were in the red at midday, with proxies for growth in China among the top losers.
The country's largest lender, Industrial and Commercial Bank of China (ICBC) (1398.HK)(601398.SS) shed 1.7 percent in Hong Kong and 0.5 percent in Shanghai.
PetroChina Co Ltd (0857.HK) sank 2.5 percent in Hong Kong to near a more than four-month low at HK$9.90, recorded last Friday. It has now lost more than 15 percent in May, only performing worse on a monthly basis in October 2008, when it dived 29 percent.
CICC economists said in a weekly note that China's economic growth could fall to 6.4 percent in 2012, assuming a Greek euro exit would hurt global economic growth by half as much as the 2008-09 global financial crisis.
"In this case, China would need to step up counter-cyclical fiscal policies to maintain its growth target of 7.5 percent," they said, adding that government investment would be the main way to stimulate the world's second-largest economy.
TECH WEAK ON DELL, FACEBOOK
The technology sector also struggled after a weak second-quarter outlook from Dell Inc (DELL.O) and a further tumble in Facebook (FB.O) shares.
Chinese internet giant Tencent Holdings (0700.HK) remained on the backfoot, losing 0.8 percent. It is now down more than 14 percent in May after jumping almost 13 percent in April.
Lenovo Group Ltd (0992.HK), the world's No.2 PC maker by sales, slipped 2.6 percent in midday volume that exceeded its 30-day average ahead of its fourth-quarter earnings report.
During the midday trading break, it reported a 59 percent rise in fourth-quarter net profit, meeting analyst expectations as strong demand in emerging markets such as China offset weakness in Europe.
Corporate governance issues were a concern for a second-straight session.
Shanghai Pharmaceutical (2607.HK) plunged 34.3 percent, hitting a lifetime low in Hong Kong after Chinese media reported that an asset recently acquired by the company was under investigation by securities regulators.
This comes after high-end fashion group Ports Design Ltd (0589.HK), dived 38 percent on Tuesday when it resumed trading after being suspended for nearly two months. Its chairman resigned for failing to disclose financial transactions.
(Additional reporting by Vikram Subhedar; Editing by Joseph Radford)
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