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Hong Kong stocks declined, with the Hang Seng Index (HSI) retreating from a three-month high, on concern China’s deepening economic slowdown will damp corporate profits.
China Life Insurance Co. (2628), the nation’s biggest insurer by market value, fell 2.3 percent after posting lower premium income. China Aerospace International Holdings Ltd. dropped 3.5 percent after the maker of liquid crystal displays predicted a decline in profit. Li & Fung Ltd., a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., rose 1.9 percent after retail sales in the U.S. rose more than analysts expected in July.
The Hang Seng Index slipped 1.1 percent to 20,065.34 as of 10:11 a.m. local time, with 22 shares falling for each that rose. The gauge climbed 2.4 percent last week on speculation China will add to economic stimulus after export growth collapsed, industrial production unexpectedly slowed and inflation decelerated. The Hang Seng China Enterprises Index of mainland companies sank 1.2 percent to 9,798.46.
“The earnings momentum and the growth outlook is just too weak for equities to keep going higher,” Simon Grose-Hodge, head of investment strategy for Asia at LGT Group, said on Bloomberg Television. “Investors want to see more stimulus from China.”
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