China shares in limp finish to 2013’s best month, Hong Kong sinks too

China shares finished their best month this year on a whimper, with Hong Kong markets also sliding on Friday as mainland investors took profits on the outperforming property sector ahead of Chinese economic data over the weekend.

Month-end flows weighed on both markets as losses accelerated in afternoon trade. The decline on Hong Kong indexes was further aggravated by a rebalancing of MSCI indexes effective from Monday.

The CSI300 of the leading Shanghai and Shenzhen A-share listings shed 1.1 per cent, while the Shanghai Composite Index closed down 0.7 per cent at 2,300.6. In May, they climbed 6.5 and 5.6 per cent, respectively.

The Hang Seng Index closed down 0.4 per cent at 22,392.2. The China Enterprises Index of the top Chinese listings in Hong Kong slid 0.9 per cent. In May, they shed 1.5 and 2.9 per cent, respectively.

Shanghai volume was at its weakest in four days as Chinese money rates rose sharply for the second day on Friday, with the benchmark seven-day repo rate at its highest level in five weeks. Hong Kong turnover was the second-best since March 15.

“People are getting nervous about the Fed, but it’s important to realise any pullback in quantitative easing is going to have to be gradual,” said Larry Jiang, chief strategist at Guotai Junan International Securities.