Hong Kong shares close lower on profit-taking; China plays outperform

HONG KONG (AFX-ASIA) - Share prices closed slightly lower, with profit-taking in late trading reversing earlier gains amid caution ahead of the release of first quarter Hong Kong GDP and revised first quarter U.S. GDP data due later today, dealers said.

Red chips and H shares continued their upward trend amid continuing optimism Chinese companies will best weather any global economic slowdown, they added.

The Hang Seng Index closed down 56.61 points at 13,753.99, off an early low of 13,732.89 and a high of 13,956.69, on turnover of 11.18 bln hkd.

The Hang Seng May contract last traded at 13,720 points.

The Hang Seng China Enterprises Index closed up 12.18 oints at 541.92 and  the CAC Index up 10.40 points at 1,308.35.

TraHK eased 0.05 to 13.85 hkd.

The GEM index closed up 11.72 points at 277.19 on turnover of 489.09 mln hkd.

Conita Hung, head of research at Mansion House Securities, said institutional funds continued to switch out of blue chips into China plays.

"Funds were switching out of blue chips into the China related stocks, dragging the Hang Seng Index lower in late afternoon," Hung said.

Shanghai Industrial gained 0.10 hkd to 14.15 hkd and China Qingling Motors rose 0.15 to 2.15 on expectations that demand for trucks will be boosted by China's efforts to develop its western provinces.

Harbin Power gained 0.11 to 1.09 and Jiangxi Copper added 0.08 to 1.10. 

Hung said for the overall market, investor caution was evident ahead of the release of the revised first quarter U.S. GDP data later today.

Despite Fed's chairman Alan Greenspan's comments earlier in the morning, which suggested U.S. short-term interest rates are set to come down further, property and banking shares were generally a bit weaker, dealers said.

HSBC shed 0.25 to 99.75 and Hang Seng Bank fell 0.50 to 88.50.

Sun Hung Kai Properties fell 1.75 to 76.00, Henderson Land lost 0.90 to  37.30, while New World Development gained 0.05 to 10.25.

Cheung Kong fell 1.50 to 92.50 after chairman Li Ka-shing said Cheung  Kong Group has no immediate plan to restructure.

Elsewhere, China Mobile gained 0.20 to 40.50 and China Unicom rose 0.50 to 12.90.

Hutchison Whampoa fell 1.00 to 86.25 after announcing it expects to soon announce plans to invest in a new port project in China.

Smartone shed 0.05 at 9.55.

Pacific Century CyberWorks added 0.025 at 2.70 after the company said its joint venture with Telstra Corp, Regional Wireless, will submit a bid for  Singapore's MobileOne next week.

On the GEM board, tom.com rose 0.30 to 2.50 and Sunevision gained 0.09 to  1.91.

CITIC Pacific dropped 0.30 to 25.85 after it raised the size of a 10-year  global bond issue to 350 mln usd from 300 mln.

JCG added 0.55 at 5.10 on buyout talk speculation.

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