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HK stocks end lower on Nasdaq, but up 2.6 pct Q1

HONG KONG: Hong Kong stocks fell on Friday for a third consecutive day after another Nasdaq sell-off prompted investors to offload more of their high-tech stocks on the last day of the year's first quarter.

The benchmark Hang Seng Index fell 0.35 percent or 60.61 points to 17,406.54, after falling as much as 2.0 percent at one juncture and edging into positive territory for a brief interlude.

Friday's performance ends a volatile week of two consecutive closing highs, followed by a drop of almost 900 points over the last three trading days.

The Hang Seng is now down just over two percent for the week but up 2.62 percent for the first quarter of this year. "Investors are seeing value in the market at around the 17,000 level," said Eugene Law, chief operations officer at Celestial Asia Securities. "We are in the process of bottom searching."

In the broader market, turnover was a slender HK$10.4 billion, less than the daily average of HK$18.1 billion for the past three months. For every stock that rose, two fell.

Hong Kong stocks took their cue from Wall Street where the technology-laden Nasdaq suffered its fifth-biggest point decline in its almost 30-year history on Thursday, marking a 10 percent fall so far this week.

In addition to the chills sent by the Nasdaq's slump, there was some last-minute "window-dressing" by fund managers, who sought to get rid of some of their riskier high-tech counters, analysts said. While market heavyweight China Telecom (Hong Kong) Ltd dragged down the benchmark index early in the day when it fell to HK$65.00, the Chinese mobile operator ended on Friday up HK$0.25 at HK$68.25.

China Telecom has led the market this year, jumping 40 percent in the first quarter.

Other blue chip telecom and high-tech companies were unable to stave off Wall Street chills. Hutchison Whampoa Ltd ended the session down HK$1.50 at HK$140.50.

Television Broadcasts Ltd skidded 5.1 percent or HK$3.75 to HK$69.25 after on Thursday's gain on news it was forming a new company to list its Internet and pay television units on the GEM market.

Blue chip conglomerate CITIC Pacific Ltd, which is trying to position itself as a leader in China's communications market, tumbled HK$0.60 to HK$47.20. The correction in high-technology stocks spread throughout the market, with Hong Kong's high-tech GEM index plumbing new depths of 862.68 points before edging back up to 888.89, a decline of 1.2 percent from on Thursday's close.

Since its launch last week the GEM index has dropped 11.1 percent.

"It's a pretty decent correction in second-liners and tech stocks," said Andrew Look, who helps manage US$5 billion in funds for Prudential Portfolio Managers (Asia). "The tech frenzy is over for the time being." Internet firm Pacific Century CyberWorks (PCCW) followed the high-tech index down, losing 2.41 percent or HK$0.45 to HK$18.20, its lowest level since late January.

"PCCW is under pressure with the Nasdaq," said Simon Tam, dealing manager at Sassoon Securities.

Hikari Tsushin International Ltd and Softbank Investment International (Strategic) Ltd, the local flagships of their Japanese parents, both fell on Friday.

Now that the March results season is out of the way, analysts said they expected volatility in the market to continue into the next quarter, with all eyes on US interest rate moves and Nasdaq's performance.-Reuters