Bloomberg News

Hong Kong Stocks Drop Third Day Amid Overheating Signals

January 07, 2013

Hong Kong stocks fell, with the city’s benchmark index retreating for a third day from a 19- month high, as developers and energy companies dropped amid signs the market may be overbought.

China Resources Land Ltd. (1109) sank 1.7 percent, the developer’s first decline in two weeks. China Life Insurance Co. fell 1.8 percent after CCB International Holdings Ltd. cut its rating on the nation’s largest insurer. Cnooc Ltd. slid a second day after sending icebreakers to clear offshore oilfields amid the coldest winter in decades. Zoomlion Heavy Industry Science & Technology Co. was suspending after the Ming Pao newspaper cited an anonymous letter questioning the crane maker’s accounting.

The Hang Seng Index sank 0.4 percent to 23,241.45 as of 9:55 a.m. in Hong Kong. The measure has retreated 0.9 percent in the three days after reaching its highest level since June 2011. The Hang Seng China Enterprises Index of mainland companies declined 0.7 percent to 11,886.59.

The Hang Seng Index (HSI)’s 14-day Relative Strength Index, a measure of trading momentum, was at 74 yesterday, above the 70- level that some investors view as an indicator an asset is overbought. The RSI is at 70 today.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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