Hong Kong shares close slightly lower as sentiment remains cautious

HONG KONG (AFX-ASIA) - Share prices closed slightly lower on balance after a strong rebound from heavy opening losses petered out in afternoon trade amid continuing concerns surrounding the outlook for U.S. stockmarkets, dealers said.	    The Hang Seng index closed down 38.49 points at 12,583.36, off an early low  of 12,396.97 and a high of 12,705.12, on turnover of 10.99 bln hkd. 	    The Hang Seng March contract last traded at 12,625 points.	    The Hang Seng China Enterprises index closed up 5.75 points at 388.95 and  the CAC index up 7.82 points to 1,023.10.	    TraHK was unchanged at 12.80 hkd on volume of 18.20 mln units.	    The GEM index closed up 0.33 points at 261.19 on turnover of 95.89 mln hkd.	    Y.K. Chan, an analyst with CEF Brokerage, said the market did attempt to stage a rebound earlier today, but sentiment remains cautious and the upswing proved brief.	    He said the Hang Seng March contract will expire next week, and this will likely increase market volatility early next week.	    "The U.S. stockmarkets have been weak ... and investors will be anxious. However, the market has been correcting downward for the past week, it may rebound technically in the next few days," he said.	    Chan said HSBC was out of favour after its shares fell in London last night and the stock closed down 1.25 hkd at 89.50.	    "However, the decline for HSBC was smaller than expected, as it dropped to 87.0 hkd in London last night," he added.	    Within the banking sector, Hang Seng Bank finished up 3.0 at 88.75, Dao Heng Bank lost 0.40 to 37.60 and Bank of East Asia added 0.25 to 17.95.	    Dealers said bargain hunting helped support a number of Hang Seng constituents.	    Among those constituents, Wharf Holdings closed up 0.70 hkd or 3.82 pct at 19.0, Legend Holdings rose 0.20 to 5.35 and Johnson Electric gained 0.40 to 11.90.	    In the property sector, Sino Land closed up 0.025 at 3.325, New World Development rose 0.15 to 9.70 and Sun Hung Kai Properties firmed 1.0 to 72.75.	    Cheung Kong fell 1.75 to 80.50 and Hutchison Whampao added 1.25 to rest at 81.50.	    Selling pressure for China Mobile remained severe amid fears will be the biggest loser if a telecom price war breaks out in mainland China, dealers said.	    China Mobile slid 0.90 to 33.30 on trade of 34.73 mln shares.	    Rival cellular service provider China Unicom rose 0.15 to 8.85.	    SmarTone gained 0.05 to 10.05 and PCCW eased 0.025 to 3.575.	    On the GEM board, tom.com closed unchanged at 2.00 and Sunevision down 0.025 at 2.175.	    Of the China plays, China Merchants fell 0.05 to 5.25, China Resources added 0.10 to 10.25, Tsingtao Brewery rose 0.19 to 2.10 and China Eastern Airlines gained 0.02 to 1.05.	    China pharmaceutical shares were sharply higher today, with bargain hunters focusing their attention on those stocks currently trading at relatively low price/earnings multiples, dealers said.    	    China Pharmaceutical closed up 0.05 at 0.81, Guangzhou Pharmaceutical up 0.16 or 11.59 pct at 1.54 and Shangdong Xinhua Pharmaceutical up 0.15 or 11.02 pct at 1.51.

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