HONG KONG - Hong Kong shares fell on Monday as local developers tumbled on fears that new measures to cool soaring property prices will sap demand, but broader losses were limited by earnings-driven strength in Chinese banks.
The Hang Seng Index went into the midday trading break down 0.2 per cent at 21,503.8 points, the lowest in more than a week. The China Enterprises Index of the top Chinese listings in Hong Kong was up 1 per cent.
On the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings slipped 0.2 per cent, while the Shanghai Composite Index was down 0.1 per cent.
"There's some rotation from Hong Kong developers into the Chinese banking sector after CCB and AgBank posted pretty good results over the weekend," said Jackson Wong, Tanrich Securities' vice-president for equity sales.
"I think many are quite surprised by the severity of the 15 percent special duty, so many are taking profits on the sector, which has done very well this year so far," Wong added, referring to fresh propery measures announced by the Hong Kong government after the market closed on Friday.
The government imposed a new 15 per cent tax on foreign and corporate real estate buyers and stiffened the resale stamp duty fees in the hope of calming the city's property prices, which have surpassed historical highs hit in 1997.
Shares of New World Development, which before Monday had jumped more than 100 per cent on the year, tumbled 7 percent to their lowest since Oct. 3. It is set for its worst daily loss since last November.
Sun Hung Kai Properties and Cheung Kong Holdings each lost more than 5 per cent, while Henderson Land dived 8.1 per cent.
But in a report on Monday, Citi analysts said any dip in the sector repsented "an enhanced buying opportunity", believing stabilising home prices remove policy risks and asset bubble concerns.
OFFSHORE CHINA STRONG ON BANKING SECTOR
Strength in the Chinese banking sector helped the offshore Chinese markets outperform onshore peers.
China Construction Bank (CCB) rose 1.2 per cent and Agricultural Bank of China (AgBank) jumped 3.1 per cent after both followed, over the weekend, Bank of China (BOC) in posting positive third-quarter corporate earnings.