Hong Kong shares close morning lower on profit-taking

HONG KONG (AFX-ASIA) - Share prices closed the morning session lower on profit-taking after yesterday's rally, with the overnight gains on Wall Street failing to sustain sentiment, dealers said. 

	    Concerns ahead of tomorrow's re-weighting of the Morgan Stanley Capital International indices also dragged the index lower, with investors apprehensive that Hong Kong's weighting will be reduced, they added.

	    The Hang Seng Index closed the morning down 153.47 points at 13,484.40, off an early low of 13,449.04 and an early high of 13,631.40, on turnover of 4.38 bln hkd.

	    The Hang Seng May contract last traded at 13,487 points.

	    The Hang Seng China Enterprises Index was up 0.62 points at 501.43, while the CAC Index was down 2.75 points at 1,242.55.

	    The Tracker Fund was down 0.10 hkd at 13.60 and the GEM Index was down 0.02 points at 261.84 on turnover of 174.01 mln hkd.

	    Conita Hung, head of research with Mansion House Securities, said: "Profit-taking was evident across the board after yesterday's gains on the local bourse, with investors remaining cautious ahead of the release of MSCI's re-weighting in the indices tomorrow."

	    The weighting of the Hong Kong market in the MSCI indices will possibly be reduced as many local stocks have a relatively low free float, dealers said.

	    "The market has been taking into account a possible reduction of Hong Kong's weightings in the MSCI indices for some time. While the market is lacking any major fresh leads, players are taking the chance to lock in profits," Vickers Ballas sales director Anthony Mak said.

	     Interest rate sensitive counters were pressured by profit-taking after posting gains in the past few sessions on expectations of further U.S. rate cuts, dealers said.

	    HSBC fell 1.50 to 97.75 hkd and Hang Seng Bank shed 1.00 to 88.50.

	    Bank of East Asia lost 0.15 to 18.25.

	    Sun Hung Kai Properties fell 0.25 to 76.00, Henderson Land shed 0.30 to 36.60 and New World Development fell 0.05 to 10.10.

	    Cheung Kong rose 0.25 at 92.75 on expectations that the stock will be re-instated in the MSCI indices, dealers said.

	    Telecom shares were tracking the performance of the general market amid a lack of fresh leads, they said.

	    Hutchison Whampoa fell 1.50 to 85.75 and Pacific Century CyberWorks was unchanged at 2.725.

	    China Mobile fell 0.50 to 38.50 and China Unicom lost 0.25 to 11.80.

	    China related stocks were mixed with bargain hunting seen in some counters after their early losses, they added.

	    China Pharmaceutical fell 0.04 to 0.91 and Stone shed 0.02 to 1.09.

	    CNOOC lost 0.30 to 7.95, Sinopec was unchanged at 1.47 and PetroChina was steady at 1.75.

	    On the GEM board, tom.com fell 0.025 to 2.175 and Sunevision shed 0.03 to 1.79.

	    HKCB Bank rose 0.30 at 3.75 on renewed speculation that it will receive a takeover proposal from a third party.

	    Johnson Electric shed 0.45 at 14.50 amid concerns over the U.S. economy.

	    First Pacific was down 0.10 at 1.64 on institutional selling.

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