Hong Kong shares ended the week with a modest loss as investors opted to take profits before an interest rate cut, which was announced after the close of trade. The Hang Seng Index finished down 79.94 points, or 0.77 per cent, at 10,233.36, after early gains were eaten away. Over the week, the lead index rose 2.35 per cent. Fulfilling investors' expectations, the Hong Kong Association of Banks said short-term deposit rates would be lowered by 25 basis points to 4.75 per cent from Monday. Association chairman Mervyn Davies said 'the trend for interest rates is downward', suggesting further reductions might follow in the next few weeks. The reduction followed a move by the United States Federal Reserve on Tuesday and will see Hong Kong's prime lending rate fall to 9.5 per cent from 9.75 per cent. 'It seems like the news was discounted. Most investors expected a cut,' one broker said. Turnover was $8.46 billion, compared with the daily average of $8.18 billion over the past three months. 'The market price-earnings ratio is about 13 times. Buyers are not going to push it any more. Prices have moved up but the recovery is lagging,' the broker said. Brokers said market sentiment was bolstered by continued gains on the Tokyo share market amid hopes for a sales tax cut. Strong performances from financial group HSBC and developer Sino Land also pared the day's losses. HSBC rose 2.75 per cent to $186.50, while Sino Land added 1.31 per cent to $3.85. Brokers said the developer had climbed 24.19 per cent this week amid a strong response to its partially owned Island Harbourview development. Infrastructure player Hopewell sank 7.47 per cent to 99 cents after it said on Thursday that losses for the year to June 30 had widened to $2.81 billion. Mainland-related shares were also slightly weaker, with the H-share index ending 0.47 per cent softer at 472.12 points and the red-chip barometer losing 1.26 per cent to 1,069.66 points. Brokers said the market could move lower in the opening sessions of the coming week in the absence of fresh supportive news. KEY FIGURES Close: 10,233.36 (- 79.94) Turnover: $8.46 bln Volume: 6.87 bln shares Day's high: 10,453.92 Day's low: 10,227.98 Advanced: 300 Declined: 265 Unchanged: 401 November futures: 10,190 (-80) December futures: 10,210 (-100)
