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SCMP Reporter

Hong Kong stocks drifted lower in sluggish trading yesterday, with investors cautious about the earnings season.

  Turnover dwindled as the market awaited further corporate results, and buyers were unwilling to take large positions ahead of the Easter break.

  Worse than expected results from New World Development saw it sold heavily and this led most property stocks lower.

  The Hang Seng Index closed 35.99 points down at 11,030.58, a loss of 0.32 per cent. At one stage it had been 36.05 points up.

  Turnover was moderate at $4.081 billion, almost unchanged from the revised $4.082 billion for Wednesday.

  Kent Rossiter, institutional sales manager at Sun Hung Kai Investment Services, said: 'Nobody went out on a limb much on any of the blue chips.

  'New World was the exception.

  'Its results were below expectations and it ended up that way.'   New World dropped sharply in the afternoon after announcing that its operating profit fell by more than a third in the six months to December 31.

  Its shares closed 80 cents down at $36.80.

    The expiry of the March futures added to volatility and contributed to several large intra-day swings.

  The March contract fell 17 points to close at 11,051, a premium of 20.42. The April contract tumbled 115 points to 10,990, a discount of 40.58.

  In London, the Hang Seng London Reference Index closed down 54.2 points at 10,976.38.

  A fall on Wall Street on Wednesday added to downward pressure.

  The Dow Jones Industrial Average had its biggest fall in three weeks, dropping 43.72 points to 5,626.88 on concern about rising bond yields.

  Among the 33 Hang Seng Index constituents, 10 rose, five closed unchanged and 18 lost value.

  Properties led the way down, with the Hang Seng property sub-index losing 1.08 per cent to 20,193.87.

  Utilities also gained as buying of Hongkong Telecom boosted the sector.

  The Hang Seng utilities sub-index rose 0.78 per cent to 10,732.02.

  Telecom closed 15 cents up at $15.20.

  A few of the smaller counters also attracted heavy interest.

  Toy-maker Harbour Ring International jumped 10 cents, or 13.88 per cent, to 82 cents on rumours it was planning a spin-off of its property interests.

  Looking ahead, brokers said the market would head lower but in quiet trading.

  Lehman Brothers Finance launched six million American-style call and put warrants on the Hang Seng Index in late London trade on Wednesday.

  The call warrants have strike levels set at 11,000, 13,000 and 15,000.

  The puts carry strikes at 9,000, 11,000 and 13,000.

   Credit Lyonnais issued 300 million covered call warrants on Hongkong Electric yesterday at 58.88 cents each. The warrants carry a strike price of $21.76, equivalent to 85 per cent of yesterday's close.

  The premium was set at 8 per cent and gearing at 4.35 times for the issue, which expires on March 27, 1997.

KEY FIGURES Close: 11,030.58 (-35.99) Turnover: $4.08 bln Volume: 1.33 bln Day's high: 11,102.62 Day's low: 11,014.5 Advanced: 156 Declined: 302 Unchanged: 358 Mar futures: 11,051 (-17) Premium: 20.42 points 



New World leads price slide