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HK stocks end lower as investors cautious

HONG KONG: Hong Kong stocks fell for a second day on Tuesday as investors remained cautious amid renewed global concerns about the value of high-tech stocks and ahead of Taiwan's presidential election.

The benchmark Hang Seng Index which slipped in and out of positive territory to climb as high as 17,220.26 in the morning, closed down 0.98 percent or 167.52 points at 16,929.16, off the low of 16,837.02.

A slight rebound in Japanese high-technology stocks did not provide enough support for Hong Kong Internet stocks, which have been slammed in recent days over concerns that these high-flying counters are overvalued.

"Internet stocks are driven by momentum and the momentum is fluctuating," said Chan. There is no established benchmark or model to value Internet stocks in Asia so investors scale back when uncertainity arises, he added.

"That's why there's a pullback, but I'd expect the momentum to come back," Chan said.

Pacific Century CyberWorks (PCCW) which has been following its Japanese Internet companies down, closed on Tuesday at HK$20.50, a fall of HK$0.20.

Television Broadcasts Ltd, which is the latest in media stocks to gain on its Internet potential, resumed on Monday's dive, falling 9.28 percent or HK$6.75 to HK$66.00.

Chinadotcom Corp subsidiary HongKong.com Corp, which has fallen every day since its debut last week, lost 13.47 percent or HK$0.65 to HK$4.17. In China plays, red chips fell 1.90 percent while in Taiwan stocks closed higher on state fund buying to calm market jitters ahead of on Saturday's election.

Chinese state owned enterprises listed in Hong Kong, known as H-shares bucked the market weakness, jumping 2.38 percent.

"With the business reporting season for the H-shares, decent cash flow and a cheap price, investors have every reason to pick up in these counters," said an analyst at a local brokerage house.

Looking ahead, analysts said low turnover was a sign of a declining market, and if daily volumes continued to be less than HK$15 billion, the market could have difficulty regaining momentum as investors stay on the sidelines.

"If the low turnover continues it indicates that not many people are wanting to buy," said Ricky Tam, senior research analyst at Delta Asia Securities.

"I'd expect the Hang Seng to trade in the range of 16,800 to 17,200 as the market waits for more direction from the US Fed meeting on March 21," said Kitty Chan, fund manager at APC Investment Management Services Co Ltd. -Reuters