HK: Stocks hit 2-wk low

[HONG KONG] Hong Kong stocks closed at two-week lows on Monday as the launch of the Shenzhen-Hong Kong investment link received a muted response, with risk appetite curbed by the Italian referendum result and a tumble in mainland shares.

The main index in Hong Kong fell 0.3 per cent, to 22,505.55 points at the close, while the Hong Kong China Enterprises Index lost 0.7 per cent, to 9,711.80 points.

The broader Asian market fell after Italian Prime Minister Matteo Renzi resigned after voters rejected his constitutional reform plan, knocking down the euro and raising fears the political crisis could destabilise a shaky banking sector in the euro zone's third biggest economy.

Sentiment was also soured by a slump in the Chinese market, where a blue-chip index fell the most in six months after China's top securities regulator warned of "barbaric"leveraged share acquisitions.

Although the launch of the Shenzhen-Hong Kong Stock Connect is expected to channel fresh Chinese money into the city, there was little excitement on Monday toward the long-awaited scheme.

An index tracking Hong Kong's small caps closed nearly 0.4 per cent lower on Monday, wiping out earlier gains.

Most sectors lost ground in Hong Kong, with an index tracking mainland property developers listed in the city among the worst casualties, falling over 2 per cent. The slide was partly driven by a 7.5 per cent slump in Vanke , which has been at the centre of a bidding war for management control.

REUTERS