The Hong Kong stock market ended 0.79 per cent lower in lacklustre trading yesterday, ahead of a long weekend. The Hang Seng Index fell 101.65 points to 12,733.24 on a turnover of $7.05 billion. Investors remained sidelined ahead of the United States interest rate setting Federal Open Market Committee meeting on Tuesday and Wednesday's policy address by Chief Executive Tung Chee-hwa. 'The overall sentiment is still cautious. But I think the interest rate concern has largely been reflected in share prices,' KGI Asia associate director Ben Kwong Man-bun said. Interest rate sensitive property stocks were generally weaker, with Henderson Land Development easing 1.37 per cent to $35.90 and Sun Hung Kai Properties slipping 1.65 per cent to $59.25. Core Pacific-Yamaichi research director Alex Tang Yee-yuk said: 'Inflationary pressure has been building up for a while amid rising oil and commodities prices, but economic data from the US has been mixed, which gives a 50-50 chance of a rate rise.' He said an interest rate rise next week would limit his year-end target for the Hang Seng Index to less than 14,000 - 1,000 points less than his forecast if interest rates remained stable. Mr Kwong said that despite rumours the amount of government shares to be sold would be lower than initially expected, and that China Telecom's share placement might be postponed, substantial fund-raising activities were still expected this month. Internet and technology-related counters remained the market's focus, accounting for half of yesterday's 20 most actively traded stocks. Pacific Century CyberWorks was unchanged at $6.55, off an intraday high of $6.80, on news that the size of its share placement was scaled back by more than 80 per cent, with a higher than expected offer price of $6.50. Chinney Alliance soared 106.31 per cent to 42.5 cents on speculation mobile telephone operator Sunday would be injected into the company after two directors of Sunday's parent Distacom Communications acquired a 10.3 per cent stake in Chinney. Other technology concept counters were weaker on profit-taking, with Star East easing 9.23 per cent to $2.95 and Asia Orient falling 7.61 per cent to 97 cents. Tai Fook Securities deputy managing director Lennon Chan Wing-luk said: 'With many of these stocks, once the concept story behind materialises and becomes fact, investors will start to take profit.' Red chips and H shares were weaker, falling 0.98 per cent and 1.24 per cent respectively, on a lack of good news related to Beijing's World Trade Organisation bid.
