THE failure of the Japanese Government to rescue the US dollar combined with profit-taking on property counters to drag the Hang Seng Index down 17.02 points, or 0.2 per cent, to 8,644.97 yesterday. Trading was thin after the long holiday with a turnover of $2.14 billion, compared with the adjusted turnover of $2.48 billion last Thursday. Analysts said the market was overshadowed by cautious sentiment as the US currency continued to drop against the yen after the Japanese Government announced its rescue package on Friday. Investors generally doubted the effectiveness of the package and expected the US dollar to drop to new lows, analysts said. Mansion House analyst Jenny Ting said: 'The US dollar seemed to be more stable before the holiday and it plunged again after the holiday. 'It is natural for the investors to be sidelined.' The weakness of Wall Street overnight also dampened sentiment. The Dow Jones Industrial Average closed at 4,195.38 points, down 12.8 points, or 0.3 per cent on Monday. While the market was generally quiet without aggressive selling or buying, profit-taking in the property sector pulled the benchmark index down. The Hang Seng properties sub-index underperformed the Hang Seng Index, eroding 147.86 points, or 1.01 per cent, to close at 14,483.97 points. 'The property stocks have led to the breakthrough of the 8,000-level and there was no major consolidation since then,' Ms Ting said. 'The property sector has a certain level of accumulated gain and it is time for them to go profit-taking.' Dharmala Securities analyst Ben Kwong said the market was awaiting the response to new property projects, fearing purchasing power has been absorbed in several large sales recently. He said most of the selling interest in property counters was seen in the afternoon session. Trading was kept in a narrow range, with the intra-day high at 8,697.35 points and the day's low at 8,628.33 points. The morning session closed at 8,662.95 points, down slightly, by 0.96 points, or 0.01 per cent. Brokers said the market saw some American firms buying defensive heavyweights such as Hongkong Bank and Hongkong Telecom. Some European and Japanese firms were also buying, but brokers said the buying interest was cautious. Mr Kwong said the drop yesterday was mild compared with the gain over the last week. 'It is quite natural for the market to have some profit-taking and the selling pressure was not large,' he said. He said the direction of the Hang Seng Index would be decided by the performance of the US stock market and the greenback. 'I think the index only consolidated for a while after the gain last week and it will be able to rise again with some good news,' he said. He expected the index to trade in a range of 8,500 to 8,800 points in the short term. Sun Hung Kai Properties shed 75 cents, or 1.42 per cent, to close at $52.25 with a turnover of $91.9 million. Henderson Land loss 40 cents, or 0.897 per cent, to close at $44.2 with a turnover of $55.7 million. Hongkong Telecom added 15 cents to $15.35.