Hong Kong, China shares slip on weak volume, Dongfeng outperforms

Mon Nov 26, 2012 4:48am GMT

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Quotes

   

* HSI flat, H-shares -0.1 pct, CSI300 -0.2 pct

* China telcos weak, profit taking after last week's gains

* Chinese booze makers weak again after Friday's rebound

By Clement Tan

HONG KONG, Nov 26 (Reuters) - Onshore Chinese shares slipped in lackluster trade on Monday, dragged lower by large cap liquor and financial stocks, to keep Hong Kong markets on the back foot.

The Hang Seng Index went into the midday trading flat after posting its best week in 2-1/2 months last Friday. The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.1 percent.

In the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings fell 0.2 percent, while the Shanghai Composite Index was flat. Both indexes have been trading in a tight 40-50 point range for more than a week.

"There's some pretty heavy profit taking today after the strength of last week and with A-shares still sluggish," said Jackson Wong, Tanrich Securities' vice-president for equity sales.

Shares of Chinese telcos in Hong Kong eased on Monday after outperforming last week, with the two smaller players in the sector seeing bigger losses. China Unicom and China Telecom shed 0.8 percent and 2.1 percent from two-week highs set last Friday.

Their larger rival, China Mobile slipped 0.4 percent and was among the top drags on the Hang Seng Index after jumping 5.8 percent last week. It is still down 2.7 percent on the year and set for its first annual decline in four years.

Cathay Pacific fell 2 percent following a statement on Friday that its overall cargo revenue this year is 13 percent lower than in 2011 due to weak demand and high fuel costs.

Chinese alcohol producers, hammered last week by a contamination scare involving Jiugui Liquor were broadly weaker in mainland markets after a rebound on Friday.

Jiugui tumbled the maximum 10 percent in Shenzhen, while sector heavyweights Kweichow Moutai lost 1.8 percent abd Wuliangye slipped 1.1 percent.

DONGFENG, ESPRIT OUTPERFORM

Bucking broader market weakness, Chinese automaker Dongfeng Group jumped 5.9 percent in Hong Kong in heavy volumes to its highest level since August.

Local media reported French carmaker Renault SA is planning to launch a joint venture to build cars in China with the country's second-largest automaker.

Esprit Holdings soared 5.1 percent after the company said its rights issue was oversubscribed by about 7 times. It is now up 39 percent this year on hopes that its new management can turn the bealeagured Europe-focused retailed around.

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