THE whimper that ended Foreign Secretary Douglas Hurd's meeting in Beijing dragged the Hang Seng Index down 51.78 points to 7,070.61 as foreign investors continued to give the market a wide berth. In the fifth successive day of losses, action was again sluggish, with early estimates putting turnover at $3.29 billion, up from a corrected figure of $2.95 billion on Thursday. With the economic problems in China continuing to drive US and other fund managers away from Hongkong, the day belonged to the local investors. In what some brokers dubbed a perverse reaction, the news that China has given the green light to the first phase of the Central-Wan Chai reclamation scheme, served only to take the market lower. Other brokers said the news, also emerging from Mr Hurd's meeting with Chinese Foreign Minister Qian Qichan, that the Sino-British talks on extended democracy for Hongkong could drag on for a further two months, served to depress sentiment. Baring Securities associate director James Slade said: ''We thought that an agreement and a blessing on the go-ahead of the reclamation would have been positive and, in fact, it was the opposite. ''It must have been that locals got wind of it and it was already in the market, while they were expecting more on the airport front. I don't think anyone cares too much about the reclamation, but it is very important and a massive project.'' The market rose swiftly on opening yesterday, but peaked within a half hour at 7,188. Afterwards it clambered down, nosing up again into the lunch hour to finish the session at 7,152.25. The story that Deng Xiaoping was ailing did the rounds again yesterday - with a novel twist, reported in certain quarters, that China's paramount leader was being flown to Japan in search of urgent medical care. In the afternoon it was a one-track descent that was arrested only by the closing bell. The hammer came down on the land auction at much the same time, with a dose of good news that is likely to cheer trading on Monday. Brokers are expecting the property section especially - which once again led the downturn - to take a filip from the sale of two lots to Sino Land's Ng family at a generous premium to expectations. Sino Land yesterday closed down 10 cents at $5.90. Much of the activity in the market was clustered round Goldlion, whose $259 million placement filtered through yesterday. The counter plunged 65 cents to $8.75 on the back of $290.39 million worth of deals: the placement itself was pitched at $8.65. Behind it, HSBC Holdings crept closer to its more usual slot at the top of the most-active league, unchanged at $74.50 on a turnover of $178.62 million. Also active, Hutchison dropped 20 cents to $20.90 as $132.86 million worth of shares changed hands. Hang Lung led the constituent stocks' fall, dropping 4.24 per cent or 50 cents to $11.30 and shaving 3.57 points off the index. The property sector was broadly slack: both putting in top-10 turnovers, Cheung Kong fell 40 cents to $26.40 and SHK Properties 25 cents to $38.25. Salomon Brothers institutional salesman Julian Lees said: ''The good news was that two very good things came out of the government land auctions when two sites that did not have that much interest in them initially heavily exceeded forecasts. ''Both were bought by Sino Land's controlling shareholder Robert Ng, at much better than expected price tags and that will give the market a small filip.'' He said further indications that confidence had not departed the market came from index futures, where contracts continued to trade at a 30-point premium throughout the afternoon and suggested there was no panic selling. Corporate news in the market came from Allan International, where director Cheung Shu-wan dumped nine million shares, representing 3.21 per cent of the company's issued share capital. CNT Group, which yesterday plunged 6.09 per cent or seven cents to $1.08 on the back of a $37.33 million turnover, put out a memo to the exchange saying it noted the jumps in share price and volume but was not aware of any reasons that might explain it. Companies buying back their own shares in the market last week include Lippo, Elec & Eltek International Holdings and World International.
