Hong Kong shares close morning lower on mixed Wall Street

HONG KONG (AFX-ASIA) - Share prices closed the morning lower on profit-taking after yesterday's gains as Wall Street failed to provide a clear direction in its overnight trade, while concerns remain over the deteriorating world economy and volatility in global financial markets, dealers said. They said the relatively small turnover indicated many investors took to the sidelines ahead of the U.S. February PPI data due tonight, which may play a role in the Federal Reserve's interest rate reductions. The Hang Seng index was down 67.50 points at 13,436.67, off an early low of 13,321.08 and off an early high of 13,530.40, on turnover of 3.61 bln hkd. The Hang Seng March contract last traded at 13,450 points. The Hang Seng China Enterprises index was up 6.50 points at 390.67, and the CAC index up 3.72 points at 1,072.27. TraHK was down 0.05 hkd at 13.65 on volume of 3.12 mln units. The GEM index was up 0.26 points at 276.48 on turnover of 46.56 mln hkd. Johnson Hui, vice president of Bank of China International Securities, said the market was still looking for the bottom, adding the Hang Seng index may test 13,000 points again. "Investor confidence is fragile. After seeing no clear direction provided by Wall Street overnight, investors just dumped their holdings," Hui said. Hui said the local market was still surrounded by concerns about the slowdown in the world economy and unstable global financial markets. "Few can be sure the effect of the recent interest rate cuts by the U.S. Fed on the U.S. economy. The bad loan problems in the Japanese banking system also bother investors," Hui said. The analyst said sentiment turned more cautious ahead of the U.S. February PPI data and an FOMC meeting scheduled for March 20. Dealers said utilities faced greater selling pressure this morning with investors locking in their recent gains after the sector's relatively stable performance. Hong Kong and China Gas fell 0.40 to 10.60 ahead of its 2000 results. CLP shed 0.80 to 39.60 and Hongkong Electric lost 0.60 to 28.60. In the property sector, Cheung Kong fell 1.00 to 89.00 and Henderson Land shed 0.10 to 42.20. Sun Hung Kai Properties lost 0.50 to 78.75 ahead of its six months to December results. New World Development gained 0.40 to 10.55 after its six months to December results. Cheung Kong Infrastructure rose 0.20 to 13.25 after its 2000 results. Among bank stocks, HSBC rose 0.25 to 95.25 and Bank of East Asia added 0.05 to 17.95, while Hang Seng Bank shed 1.00 to 88.50. Dao Heng Bank was down 0.30 at 36.70 ahead of its interim results. Telecom stocks were weaker this morning after NASDAQ failed to sustain a rebound, dealers said. Hutchison Whampoa fell 1.25 to 84.75, while Pacific Century CyberWorks was unchanged at 3.975. China Mobile was steady at 37.90, while SmarTone fell 0.05 to 10.40. On the GEM board, tom.com fell 0.05 to 2.075, while the company said it has formed a partnership with Taiwan-based ChinaTimes.com to set up an overseas holding company China-Plus to develop integrated interactive marketing business in Greater China. Sunevision rose 0.025 to 2.30, while hongkong.com fell 0.015 to 0.35. Excel rose 0.06 to 0.62 and Tong Ren Tang gained 0.25 to 2.70 after their 2000 results. Among China plays, Huaneng Power rose 0.475 to 4.175 after the company said it will acquire power plants from the parent for 12 bln yuan. Kunming Machine gained 0.10 to 1.35 and Shandong Power rose 0.09 to 1.46. China Resources gained 0.30 to 10.65, while Shanghai Industrial fell 0.30 to 12.65. Global Bio-chem last traded at 0.89 hkd, compared with its issue price of 1.02 hkd.

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