Hong Kong Stocks Pull Back After Two Days Of Gains

MarketWatch Pulse

Hong Kong stocks headed lower Tuesday morning, with the Hang Seng Index down 0.7% after ending the previous two sessions higher. The mainland-China-tracking Hang Seng China Enterprises Index dropped 1.4% in Hong Kong, even as the Shanghai Composite Index overcame early choppy trade to rise 0.5%. Banks and property stocks suffered after posting substantial gains in Monday trade: Bank of China Ltd. fell 2.1%, China Citic Bank Corp. declined 1.6%, Industrial & Commercial Bank of China Ltd. dropped 1.4%, and China Construction Bank Corp. lost 1.1%. Real-estate names posted even bigger losses, with Hang Seng constituent China Overseas Land & Investment Ltd. sliding 2.9%. Likewise, Evergrande Real Estate Group Ltd. sank 4.6%, and Poly Property Group Co. sagged 3.1%. Index component China Resources Land Ltd. -- which posted a 47% jump in April contract sales -- was suspended pending an announcement on a share placement. Chinese online major and index heavyweight Tencent Holdings Ltd. advanced 1.4% ahead of its release of quarterly earnings, due out Wednesday. Nuclear-power stocks and other related shares rallied a day before Chinese securities regulators were due to examine the initial-public-offering application of nuclear-energy giant China National Nuclear Power, which plans to raise 16.25 billion yuan ($2.6 billion). Shanghai Electric Group Ltd. surged 6%, Dongfang Electric Corp. improved by 4.7%, Harbin Electric Co. gained up 4.3%, and CGN Power Co. traded 3.3% higher. The moves came ahead of the China National Energy International Conference in Beijing, scheduled to kick off next week. In the consumer-stock sector, beverage and snack-food maker Uni-President China Holdings Ltd. rose 3.8% after its first-quarter profit surged 56% from a year earlier. Rival Tingyi Cayman Islands Holding Corp. added 4.7%, but Want Want China Holdings Ltd. nudged 0.3% lower.

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