China Mobile takes heavy toll as new economy issues join Nasdaq trend
Technology plays led the Hang Seng Index down 0.98 per cent yesterday after two days of selling on the Nasdaq Stock Market.
Brokers were philosophical, pointing out the drop came on a moderate turnover of HK$11.46 billion and was lighter than falls in other regional exchanges.
'People aren't aggressive at this stage. The market is waiting for news,' Mansion House Securities research head Stanley Ng Wing-chark said.
With no significant domestic news, investors took their cue from the United States, where technology stocks had been hit.
Nonetheless, the pressure on technology stocks was attributed to the downgrading of US semiconductor mainstays Intel Corp and Micron Technology, which triggered the sell-off on Nasdaq on Wednesday.
China Mobile dropped 1.59 per cent to $61.75 and provided the main drag on the market, pulling the index down 57 points. Hutchison, Pacific Century CyberWorks and Legend also contributed to the points drop.
CyberWorks fell 1.77 per cent to $13.85 - its lowest price in two months. The fall was in line with declines by other telecommunications and technology stocks.
Away from the new economy, the market was dominated by news Sun Hung Kai Properties would single-handedly develop the Kowloon Station project. The counter fell 4.2 per cent to $74.
Vickers Ballas institutional sales director Anthony Mak said: 'It's a long-term, huge capital commitment project. The market isn't fully positive on this commitment.'
Outsourcing company Li & Fung declined 1.69 per cent to $34.80 on news of a $2.26 billion share placement but analysts were unfazed.
Mr Ng said: 'This isn't bad news. The fact that [a holding company controlled by brothers Victor Fung Kwok-king and William Fung Kwok-lun] has taken up the shares shows that they are still confident. The prospects for this counter are still bright.'
The Growth Enterprise Index fell 3.26 per cent as Tom.com's placement was greeted less favourably. The stock was the market's biggest net loser as it fell 12.06 per cent to $5.10.
Dao Heng Securities deputy head of institutional sales Geoff Galbraith said Tom.com's fate was linked to sentiment.
'The whole market looks soft. Tom.com is a feel-good factor stock. If confidence isn't there, Tom.com won't be up. It's a barometer of the market,' he said.
However, Merrill Lynch Internet analyst David Cui was encouraged by the placement.
'From a bottom-up perspective it's quite good because people always worry about them running out of cash . . . their cash burn-rate is quite high so they need money to sustain the business,' he said.