Poor showing in Tokyo also dampens the mood but analysts draw comfort from high liquidity Hong Kong stocks finished lower yesterday as a rebound in oil prices and weakness in the Tokyo markets weighed on buying sentiment. But traders say the market is flush with liquidity and the session was marked by a rotation of funds rather than outright selling. The Hang Seng Index dropped 47.86 points, or 0.35 per cent, to 13,624.51 but held above the technically important 13,600 level, which it broke for the first time in eight months on Wednesday. The H-share index eased a modest 0.07 per cent, settling 3.56 points lower at 4,794.21. Wednesday's interest-rate increase in the United States had little impact since Hong Kong banks - as expected - did not follow suit. However, after the market closed, HSBC, Hang Seng Bank, Standard Chartered, ICBC (Asia) and DBS Bank said they would cut their prime lending and savings rates in response to exceptionally low money market rates. Bank officials had already suggested that savings rates might need to come down in order to reduce the widening negative gap between the interest they pay on deposits and the dwindling income they earn from lending in the interbank market. However, the cut in lending rates surprised analysts, who said the move could help boost property stocks today. 'It's a very powerful signal that the cost of money will remain very low,' said Trevor Cheung, head of research at DBS Vickers, noting this may boost demand for mortgages. Sun Hung Kai Properties dropped 0.66 per cent to $75.75 and Henderson Land fell 1.03 per cent to $38.60. Cheung Kong, Hang Lung Properties and Wharf closed unchanged, while Swire Properties edged up 0.42 per cent to $59.25. HSBC was also unchanged, at the record high of $132.50 it reached during the previous session, after retreating from an intraday high of $133. Esprit was the worst-performing blue chip in percentage terms after chairman Michael Ying Lee-yuen raised $4.09 billion by selling shares at $42.10 each. The price represented a 6.02 per cent discount to the latest closing price. The stock, which resumed trading after a one-day suspension, fell to match the placement price intraday before finishing 5.13 per cent lower at $42.50. Hong Kong and China Gas fell 3.05 per cent to $15.90, reversing most of the previous day's 3.5 per cent gain. Denway Motors, the mainland joint venture partner of Honda Motor, gained for the third day in a row, despite a drastic drop in car sales in the mainland last month. It added 3.7 per cent to $2.80. Airlines gained after China Eastern and China Southern reported an 11 per cent increase in passenger numbers last month. China Eastern rose 0.62 per cent to $1.61 while China Southern gained 2.50 per cent to $3.075. After the market closed, Cathay Pacific Airways said it carried 14.7 per cent more passengers last month than it did a year ago. The stock closed 0.36 per cent higher at $13.80. Other tourism-related stocks were also stronger after Hong Kong raised its visitor arrival forecast for this year by 4 per cent to a record 21.3 million. Star Cruises jumped 4.94 per cent to $2.125. Profit-taking on metals and raw material H shares contrasted with another strong performance from China Life Insurance, which gained 2.68 per cent to $5.75 amid expectations it will benefit from rising interest rates. Aluminum Corp of China dropped 1.56 per cent to $4.725 while Jiangxi Copper gave up 0.56 per cent to $4.425. PetroChina fell 0.59 per cent to $4.20 despite a more than 3 per cent gain in the price of crude oil overnight. Hutchison Telecommunications International rose 1.7 per cent to $6.05 after an unconfirmed report that it planned to cut labour costs by 30 per cent.