HSBC failed to extend its 11-day winning streak, dipping 0.67 per cent to $132.70. The lender has risen 3.83 per cent in the past three weeks on expectation that it will post encouraging final results.

China Mobile, the country's largest mobile service provider, retreated 1.58 per cent to $37.30.

Profit taking in the two heavyweights pulled down the Hang Seng Index to close at 15,818.09, losing 100.39 points or 0.63 per cent. Turnover shrank to $29.91 billion from $34.54 billion on Tuesday.

Francis Lun, a general manager at Fulbright Securities, expected a larger-scale market correction after HSBC's earnings announcement.

'The tendency of HSBC to see weakness after its final result may provide an excuse for a larger correction and the index support level will be at 15,500,' he said.

The H-share index, which has recorded much larger gains than the blue-chip index so far this year, consolidated for the fifth consecutive day.

The index fell 19.98 points or 0.31 per cent to end at 6,486.2, dragged down mainly by Bank of Communications.

Bocom slid 2.66 per cent to $4.575 while bigger rival China Construction Bank fell 0.69 per cent to $3.60.

Mainland insurance stocks, however, found support after the recent sell-offs. Ping An Insurance rebounded 1.38 per cent to $18.35 and China Life Insurance closed flat at $8.85.

Despite the recent correction, Daiwa Securities remained bullish on mainland stocks especially financials and retailing, believing the healthy correction would provide better opportunities to accumulate at lower levels.

CLP bucked the market trend supported by strong full-year results, adding 0.22 per cent to $44.55.

Lifestyle International also jumped 4.01 per cent to $12.95 after it posted a higher than expected full-year profit. The operator of department store Sogo saw net profit increase 30.24 per cent to $539.37 million last year.

Nomura Securities set a target price of $13.45 for Lifestyle as it believed Sogo was a steadily growing cash cow and the Tsim Sha Tsui store would make its full-year contribution next year.

In stark contrast, SmarTone Telecommunications slid 5.11 per cent to $8.35 after it posted an 83.4 per cent plunge in interim net profit to $37.04 million on the back of rising 3G handset subsidies.

To reflect considerable handset subsidies, Citigroup cut SmarTone's earning forecast for next year by 70 per cent and kept the 'sell' rating on the stock.

Separately, sources said Advanced Semiconductor Manufacturing, a Shanghai-based chipmaker, was scheduled for a listing hearing today for its about US$100 million initial public offering in Hong Kong.

The company, which reported a full-year loss last year, is believed to have sought a profit record waiver from the stock exchange or satisfied alternative listing requirements. Goldman Sachs and Bank of China International are the arrangers of the share sale.

Meanwhile, the interbank rate yesterday rose, with about $170 billion in subscription funds for the Nine Dragons Paper offer still locked up. At one time, the overnight rate hit 5 per cent, although it closed at 4.5 per cent. Market dealers expect rates to eventually normalise to about 3.6 per cent after funds are returned to investors who oversubscribed.