Hong Kong shares slid 1.52 percent yesterday in thin turnover, with bleak jobs data from the US intensifying recession worries and higher oil prices expected to further erode company profits.

Resources stocks and related counters also fell on concerns that a slowdown in the mainland economy could curb its growing appetite for commodities.

The Hang Seng Index (HSI) closed down 1.52 percent, or 347.68 points, to 22,514.92. With investors scrambling for the sidelines amid further market losses, mainboard turnover fell to HK$49.1 billion from HK$60.7 billion on Friday.

Container and port operators slid on increasingly negative forecasts from analysts on global trade. COSCO Pacific, the world's fifth-largest container port operator, tumbled 5.9 percent, while China Shipping Container Lines dropped 4.6 percent.

Metal stocks also took a sharp hit, with Maanshan Iron & Steel plunging 6.3 percent and Angang Steel falling 5.4 percent on concern over softening demand and increasing raw material costs.

"It's a bit of an anti-climax, but with the US economy teetering on the brink of a recession, Hong Kong stocks look poised to sink further. The HSI may slip below 22,000 this week," said Francis Lun, general manager with Fulbright Securities.

Europe's largest bank, HSBC Holdings, closed unchanged ahead of its poor first-half-earnings report. HSBC unit Hang Seng Bank, which was also due to announce its first-half earnings yesterday, fell 2 percent. Index telecoms heavyweight China Mobile slipped 1.2 percent, while top insurer China Life gave up 1.7 percent.

Asia's largest refiner, Sinopec Corp, which has been struggling with the wide gap between soaring international crude prices and regulated petroleum product prices in China, slipped 2.3 percent. Crude prices hovered close to $126 a barrel on Monday on concerns over Iran's nuclear activities.

The China Enterprises Index of top locally listed mainland firms slipped 2 percent. Li & Fung Ltd, which supplies consumer products to retail giant Wal-Mart, dropped 3.4 percent on US recession worries.

China Mengniu Dairy fell 3.4 percent to HK$22.80 after mainland's top dairy producer's shareholders sold HK$1.26-billion worth of existing shares at HK$22.02 each - a 6.7 percent discount to Friday's closing price.

China Shenhua Energy fell 3 percent and smaller rival China Coal Energy slid 2 percent.

Reuter

(HK Edition 08/05/2008 page3)