Hong Kong: Shares close down on China slump, political concerns

[HONG KONG] Hong Kong stocks dropped sharply on Monday, taking cues from weak China and global markets and ahead of a politically sensitive vote this week that could spark mass protests.

The Hang Seng index fell 1.5 per cent, to 26,861.81, while the China Enterprises Index lost 2.6 per cent, to 13,622.76 points.

Hong Kong stocks tracked losses in China, whose markets fell 2 per cent on Monday over IPO and margin tightening worries.

Risk appetites were also curbed by a coming vote on an electoral reform package backed by Beijing, which brings alive memories of "Occupy Central", a civil disobedience campaign last year that disrupted businesses in the former British colony.

A weekend poll showed that public support has shifted against the proposal amid renewed street marches by pro-democracy protesters.

Most sectors fell in Hong Kong.

Prada SpA shares fell 4.9 per cent, reaching the lowest level in three years, after posting a 44 per cent slump in quarterly earnings on weak China consumption.

PetroChina lost 1.1 per cent. On Monday, China's Communist Party said that former PetroChina Vice Chairman Liao Yongyuan has been expelled from the Party and will be prosecuted for crimes including bribery.

Bucking the broader trend, Chinese conglomerate Fosun International Limited rose 0.7 per cent.

British travel agent Thomas Cook said on Monday it had agreed to set-up a joint venture with Fosun to develop domestic, inbound and outbound tourism activities for the Chinese market under Thomas Cook brands.

REUTERS