Airlines and refiners come in for selling but shipping counters gain on brighter inflation outlook The Hong Kong market fell along with its regional peers yesterday, tracking Tuesday's losses on Wall Street amid rising oil prices and a falling US dollar. Crude oil prices remained above US$50 a barrel despite a slight drop yesterday, after rallying almost 6 per cent on Tuesday due to cold weather in Europe. The surge in oil price was also fuelled by the sharp decline in the US dollar. The greenback plunged in Asia on Tuesday after the Bank of Korea said it planned to change the composition of its cash reserves. The US dollar, however, stabilised following announcements from central banks in Japan and South Korea that they had no plans to reduce US currency holdings. Major Asian markets fell for the second consecutive day yesterday but most rebounded from lows. The Hang Seng Index eased 0.94 per cent, or 132.58 points, to close at 13,957.94 - just below the 14,000 psychological level. The H-share index fell by 0.32 per cent, or 15.95 points, to 4,919.15, despite the strength in commodities and particularly oil prices overnight. 'But the drop [yesterday] was in fact much better than I had expected,' said Peter Lai Wing-leung, a sales director of DBS Vickers Securities. 'There has been support at low points, especially on blue chips.' A broker noted trading sentiment was not too bearish and the intraday high and low range was tight at 60 points. Shares worth $16.73 billion changed hands yesterday. With oil prices remaining above US$50, oil plays in Hong Kong fell. PetroChina lost 1.06 per cent to $4.65, CNOOC was 0.58 per cent lower at $4.30, while Sinopec closed unchanged at $3.275. Deutsche Bank yesterday upgraded its investment recommendations on PetroChina and CNOOC from 'hold' to 'buy'. The investment bank said in a report that the share prices of both would be supported by firm oil prices, increased productivity and the potential for lower taxes next year under proposed tax unification. Oil prices, however, dampened the share performance of airlines. Cathay Pacific Airways fell 2.06 per cent to $14.25, China Southern Airlines slipped 0.88 per cent to $2.825, while China Eastern Airlines closed flat at $1.56. Property counters continued to see mild selling pressure after Sino Land paid a hefty $1.82 billion for an office site at Kowloon Bay on Tuesday. Many were concerned Sino Land paid too much and that the project margin would be eroded. One broker said the price seemed expensive but believed that was part of Sino Land's strategy. 'For Sino Land, with its large land bank, buying the site which is relatively small at a high price would not have a significant impact on the property developer,' the broker said. Sino Land fell 2.9 per cent to $6.70, extending the 2.82 per cent loss on Tuesday. Cheung Kong lost 1.68 per cent to end at $73.25, Henderson Land eased 0.82 per cent to $36.10 and Sun Hung Kai Properties was down 0.69 per cent to $72.25. Logistics and shipping shares, however, outperformed the broad market after economic data showed a slowdown in inflation and therefore reduced pressure for additional austerity measures to curb the economy, Mr Lai said. Pacific Basin surged 2.8 per cent to $3.675. The company will announce its full-year result for last year on Tuesday. China Shipping Container Lines rose 2.33 per cent to $3.30 and Cosco Pacific gained 1.53 per cent to $16.60. Power-tool maker Techtronic Industries skipped 1.96 per cent to $17.55 after Home Depot, one of its biggest customers in the US, said its fourth quarter earnings rose 9.5 per cent - the smallest gain in almost two years. Esprit rose 0.86 per cent to $47 ahead of its interim earning results announcement made after the market closed. The global fashion retailer said its net profit for the six months to December rose 76 per cent - beating a market consensus ranging from 20 per cent to 40 per cent. Knitted garment exporter Easyknit International was the best-performing stock. The counter jumped 35.6 per cent to 19.4 cents after it said it would sell two shops in Causeway Bay for $220 million, netting a one-off gain of about $86 million.