Hong Kong stocks drifted lower in unsettled trading yesterday, with investors cautious ahead of today's US Federal Reserve meeting. Most market players did not expect the Fed to change interest rates at the current meeting, but many fear being caught holding stocks if it does. What little buying there was favoured selected stocks such as HSBC and conglomerate Swire Pacific. The Hang Seng Index closed 18.29 points down at 11,002.61. At one stage it was 60.87 points up. Turnover rose to $3.83 billion, from the revised $3.26 billion for Friday. Sassoon Securities dealing director Michael Ng said: 'Turnover is not encouraging. People are just waiting for the interest rate direction from Wall Street.' Mixed economic data from the US has left investors confused about whether the Federal Open Market Committee will raise rates this month. US bond yields have fallen over the past week as the threat of an imminent rate rise seems to have receded. This was not enough to boost the Dow Jones Industrial Average on Friday, and the fall in US stocks weighed the Hong Kong market down through most of the day. Brokers said overall sentiment remained positive, due to recent strong property sales and the end of US-China trade friction. Among the 33 Hang Seng Index constituents, five advanced, eight closed unchanged and 20 declined. Banks stood out, as buying of HSBC helped the Hang Seng Finance sub-index rise 0.42 per cent to 10,364.61. HSBC, which has lagged the market recently, rose $1 to $118. Conglomerates were mixed, with the Hang Seng Commercial and Industrial sub-index falling 0.33 per cent to 8,261.05. Swire Pacific found some support, rising 75 cents to $67, while Citic Pacific fell 40 cents to $30.90. Among media stocks, Oriental Press Group moved sharply higher after the decision to scrap its troubled Eastern Express newspaper attracted investors. Oriental Press closed up 10 cents at $4.25. South China Morning Post (Holdings), which might have been expected to rise on the same news, closed unchanged at $5.30. Nikko Securities senior institutional sales manager Kent Rossiter said: 'It is difficult to pick the media stocks. Most people thought SCMP would gain because one of its major competitors has left the playing field.' Property stocks were mostly lower as they gave up some of the gains they made last week. Hopewell stood out for punishment as fears that it will lose its contract for an elevated mass transit system in Bangkok led investors to sell down the stock. Hopewell lost 10 cents to $4.10.
