Hong Kong stocks fell for a fourth day, the longest losing streak in almost three months, after Premier Wen Jiabao said his cabinet is drafting further measures to curb inflation.

"It's very clear that inflation expectation in China is rising very fast, so it's time for the government to act very decisively," Sun Mingchun, head of China research at Daiwa Securities Capital Markets, said in a Bloomberg interview Wednesday.

The Hang Seng Index (HSI) declined 2 percent to close at 23,214.46, extending its losses in the past four days to 6 percent.

The Hang Seng China Enterprises Index lost 2.4 percent to 12,876.34.

The HSI gained 11 percent this year through the end of last week on expectations that growth in corporate earnings would overcome concerns about the pace of the US economic recovery and the mainland's steps to curb rising property prices.

Wen's comments at a supermarket in Guangzhou were broadcast Tuesday night on state television. He didn't elaborate, beyond urging local governments to ensure market supply and order.

The Central Government may raise interest rates for a second time this year as soon as November 19, the China Securities Journal reported, citing an unidentified analyst. Earlier announcements also indicate that rate decisions are often released on Fridays or around the 20th of the month, the newspaper said.

Shenhua Energy slid 3.8 percent to HK$33.15. Aluminum Corp fell 3.2 percent to HK$7.01. Jiangxi Copper Co plunged 8.2 percent to HK$21.90. Cnooc Ltd dropped 2.7 percent to HK$16.48.

The London Metal Exchange Index plunged 6.3 percent Tuesday. Crude oil futures dropped 3 percent that day to $82.34 a barrel, the lowest settlement since October 29.

Skyworth sank 7.3 percent to HK$4.04. The company has lowered the full-year sales target of its flat-panel TV sales on the mainland to 7 million units from 7.5 million, according to a statement.

Futures on the HSI dropped 1.8 percent to 23,175. All but three stocks declined among the measure's 45 constituents.

Bloomberg

(HK Edition 11/18/2010 page3)