* HSI -0.6 pct, H-shares -1.2 pct, CSI300 -1 pct
* A-share slide not panic, but slow grind: BoComm
* Profit taking on outperformers, cyclicals suffer
* China autos sector mostly up after reported improvement in
By Clement Tan
HONG KONG, Nov 28 Shares in China fell on
Wednesday, lingering at their lowest in almost four years and
pulling the Hong Kong market, as better economic data snuffed
out hopes of imminent monetary easing to accelerate recovery in
the world's second largest economy.
A lack of progress in budget talks in the United States
further weighed on markets as it reignited fears of a fiscal
crisis in the world's largest economy, prompting investors to
lock in profits.
The Hang Seng Index slipped 0.6 percent, while the
China Enterprises Index of the top Chinese listings shed
1.2 percent. Both indexes have now lost about a third and more
than half of last week's gains, respectively.
The CSI300 Index of the top Shanghai and Shenzhen
listings slid 1.0 percent. The Shanghai Composite Index
retreated 0.9 percent, sinking further from the 2,000-point
level it closed below on Tuesday for the first time since
This was the third-straight daily decline for all four
benchmark indexes, and the weakness came in turnover that
declined from Tuesday and was below its average in the past
"This isn't panic in the A-share market, but a systematic,
slow downward grind," said Hong Hao, head of China research at
Bank of Communications International Securities.
Hong said that industrial profit data on Tuesday gave
further evidence that China's economy was improving, dousing
hopes of monetary policy easing for those still expecting the
A-share market will rebound into year's end.
"But they are waking up now, cutting their losses and
getting out of the market, especially with the bumper crop of
lockup expiry coming up in December, which will further decrease
market volumes and result in more weakness," Hong said.
On Wednesday, growth-sensitive sectors were among the bigger
percentage losers. Wuhan Steel slid 3.9 percent on
the day, while its bigger rival Baotou Steel slumped
5.9 percent to its lowest closing level since July 5.
A-share proxy plays such as Chinese insurers and brokerages
were also weak. China Life Insurance was
down 1.3 percent in Hong Kong and 0.5 percent in Shanghai. Citic
Securities lost 1.4 percent each in Hong
Kong and Shanghai.
The Chinese real estate sector, key outperformers this year
in mainland markets, was also weak. Poly Real Estate
dived 3.5 percent in Shanghai, trimming 2012 gains to 32.1
This compares to the CSI300's 9.2 percent loss and the
Shanghai Composite's 10.3 slide on the year.
CHINA OIL MAJORS WEAK
Chinese oil majors were among the top index drags as oil
prices declined. Petrochina lost 1 percent
in Hong Kong and 0.5 percent in Shanghai.
CNOOC Ltd closed down 1.7 percent at its lowest in
more than a week after the state-owned company and its Canadian
takeover target Nexen Inc withdrew and
resubmitted their application for U.S. approval of their $15.1
A spokesman for the Canadian Prime Minister did not comment
on a report that the federal government might want CNOOC to sell
the 7 percent stake that takeover target Nexen holds in the
large Syncrude oil sands joint venture, because fellow Chinese
company Sinopec has a 9 percent stake in it.
Bucking broader market weakness, Chinese automakers were
mostly higher after state news agency Xinhua reported automobile
sales and output will both exceed 19 million units this year, a
jump from last year's 14.5 million.
Great Wall Motor rose 1.2 percent in Hong Kong and
3 percent in Shanghai.