Hong Kong stocks headed lower yesterday as declines in banking and utility counters dragged the market down. Brokers said weaker United States stocks and bonds gave investors an excuse to take profits in Hong Kong after the local market had rallied earlier in the week. Hongkong Electric suffered the biggest loss among blue-chip counters after its interim results announced on Thursday disappointed the market. The Hang Seng Index closed 60.33 points or 0.54 per cent lower at 11,104.03. At one stage it had been 91.52 points down. Turnover fell to $3.41 billion from Thursday's revised $4.62 billion. Dao Heng Securities dealer Low Kok-keong said: 'The market is being driven by result announcements. With nothing to excite investors, profit-taking set in.' US stocks retreated on Thursday as bond yields rose creating concern higher borrowing costs will hurt corporate earnings. This was enough to end the rally in local stocks and sent the market sharply down at the opening. Among the 33 Hang Seng Index constituents, three advanced, five closed unchanged, and 25 lost value. Hongkong Electric led all stocks in net loss, falling 60 cents to $23.05 after reporting on Thursday a 14.3 per cent decline in net profit for the first half of the year. That fell short of analysts expectations and created concerns that other utilities could do the same. Utilities weighed the market down the most with the Hang Seng utilities sub-index falling 1.23 per cent to 9,494.11. Banking stocks headed lower after making hefty gains earlier this week. The Hang Seng finance sub-index lost 0.44 per cent to 11,292.92. Sassoon Securities dealing director Michael Ng said: 'The banks' results created focus on the banks but turnover has come down a lot.' HSBC dropped 50 cents to $133, Bank of East Asia lost 50 cents to $29.20, and Hang Seng Bank shed 25 cents to $79.50. Property stocks also succumbed to profit-taking with the Hang Seng property sub-index losing 0.23 per cent to 20,583.04. Great Eagle slipped 30 cents to $22.35, and New World Development lost 30 cents to $35.70. Brokers said investors were becoming wary about the major property counters ahead of their results season. China shares came under pressure after many had made impressive gains on Thursday. They had been boosted by news that warrants had been issued on a basket of red-chip stocks. Brokers see further slow trading next week as the market awaits further results.