Analysts are downgrading mainland telecoms stocks on concerns of tougher competition in the sector with the expected break-up of China Telecom.
These concerns drove down shares in China's only two telecoms stocks despite a 112.32-point rise in the Hang Seng Index.
Shares in China Mobile, the country's dominant cellular carrier, fell 50 HK cents to finish at HK$22.85, while rival China Unicom closed 55 HK cents lower at HK$7.90.
Analysts' concerns were sparked by reports China's State Council has decided to split China Telecom into two geographical operations, with the northern unit to be merged with China Netcom.
State-run China Daily reported the council had reached agreement on the issue after six months of discussions.
Industry sources said the geographical break up of China Telecom was the best way to introduce competition in the market without too much disruption.
