HSI ends slightly in the red as investors mull over Friday's heavy falls on Wall St and weakness in Asian exchanges Demand for property counters pushed the Hang Seng Index to a near two-month intraday high yesterday. But the index eased back to close down slightly amid weakness in regional markets and following Friday's large fall on Wall Street. Data showing that job creation in the US last month was much slower than economists had expected sparked concern that the economy was losing momentum. Still, Hong Kong was able to shrug off most of the negative sentiment as investors focused on the prospect that slower growth might lead to a less aggressive rise in interest rates. China-related shares were weaker, however, after Premier Wen Jiabao on Sunday called for a strengthening of macro-economic control measures. 'The market worries that Chinese officials are not satisfied with the slowdown and will come up with more ways to curb investments,' said Kenny Tang Sing-hing, a research manager with Tung Tai Securities. The H-share index at one point bounced about 1.4 per cent from its intraday lows, but never reclaimed Friday's closing level and gave up all of those gains before the close. It finished down 71.51 points, or 1.67 per cent, at 4,204.67. The Hang Seng Index closed 11.26 points, or 0.09 per cent, lower at 12,467.41 after retreating from an earlier peak of 12,534.64 - its highest trading level since June 14. Henderson Land reported good sales at its Grand Promenade residential project over the weekend that helped drive the properties sub-index 0.48 per cent higher - its third straight day of gains. 'The sale of 400 units is very good, especially for Henderson which hasn't launched such a big project in a while, and it has helped fuel speculation that investor confidence is returning,' said Eric Yuen, head of research at Dao Heng Securities. Henderson was the best blue-chip performer with a 1.71 per cent rise to $35.70. Cheung Kong gained 0.82 per cent to $61.50 and Sun Hung Kai Properties was up 0.37 per cent at $67.75. One dealer said the market drew comfort from talk that any rise in US interest rates would be moderate after the poor job figures. 'But there is still a high chance that there will be a rate rise [today],' he said. The consensus is leaning firmly towards a 25 basis point rise at the Federal Open Market Committee meeting to be held today. However, as a result of the July non-farm payroll data, many observers now believe the Fed will make no move next month. 'We expect the Fed to raise another 25 basis points to 1.5 per cent [today], but then hold off until after [November's] presidential election,' said David Wyss, chief economist with Standard & Poor's. The respite would be only temporary, though. 'Given the weakness in June and July, I don't see why they need to rush, but inflation is still rising and they do want to go back to a more neutral interest rate of 3.5 to 4.5 per cent in the next 18 months to two years,' Mr Wyss said. Several HSI companies that are due to report interim earnings this week, including Li & Fung, Cathay Pacific and Lenovo, also gained as the forecast-beating results from most of the banks have sparked hopes of more to come. Leading the decliners were China Mobile, which fell 0.82 per cent to $22.55, and China Unicom, down 1.74 per cent to $5.65. CNOOC also fell as crude oil futures eased slightly in offshore Nymex trading. Hutchison remained in demand after a positive shift in sentiment towards its 3G mobile operations and hopes for good earnings. The stock gained 1.33 per cent to $57, adding to last week's 6.63 per cent rise. HSBC, which was another strong performer last week following its results report, closed unchanged at $119. 'The performance [of the Hong Kong market] will depend very much on what the US market does [today],' Mr Yuen said. 'If it fails to rebound it is very likely that Hong Kong will follow it lower - we can ignore weakness on Wall Street for one or two days, but not in the longer run.' China Shipping Development was the worst H-share performer despite reporting a forecast-beating 92.5 per cent jump in first-half earnings. One trader said the 3.77 per cent drop to $5.10 was a classic case of profit taking, after the stock had risen 7 per cent in the week before the earnings. Yanzhou Coal fell 3.46 per cent to $8.35 on news the government had ordered a temporary cap on the price of coal sold to power plants, saying the negotiated price could not be more than 8 per cent above or below the mining firms' average selling price on May 31. The power producers, which are likely to see less pressure on their margins as a result of the cap, failed to benefit, however, with Datang International Power falling 3.27 per cent to $5.90, Huaneng Power off 1.63 per cent to $6 and Huadian Power finishing unchanged at $2.30.