Hong Kong shares lower on weaker Wall St

Share prices were lower, tracking the falls on Wall Street overnight, with sentiment continued under pressure after S&P's downgrade of the territory's local currency ratings outlook to negative from stable yesterday, dealers said.

They said investors were ready to take profits after the recent gains and a weaker New York provided the usual opportunity.

The S&P downgrade is negative for sentiment but the underlying facts of the fiscal position are well known and have been for some time.

At 11.17 am, the Hang Seng Index was down 118.81 points or 1.21% at 9,668.68, off a high of 9,715.67, and a low of 9,655.80, on trade of 1.563 billion hkd.

"Selling pressure in various sectors is evident following their accumulated gains over the past week. Sentiment was also hurt by the overnight weak performance on Wall Street," Polaris Securities analyst Marty Chan said.

Chan said the S&P's ratings outlook downgrade continued to dampen market sentiment.

"However, the downgrade is not seriously affecting the market as the fiscal problems are not anything new to us," he said.

S&P said it has cut the outlook on its AA-rating for Hong Kong's long-term local currency rating to negative from stable, reflecting the persistent fiscal pressures facing the government.

Chan said the market is likely to find firm support at around 9,550 points in the near term.

The Hang Seng October contract was at 9,676 points.

The Hang Seng China Enterprises Index was down 15.65 points at 1,856.54 and the CAC Index was down 26.51 at 1,065.72.

The GEM board Index was down 1.10 at 116.28 on trade of 32.669 million hkd.

In the property sector, Cheung Kong was down 0.75 hkd at 52.75, Henderson Land rose 0.40 to 24.60 and Sun Hung Kai Properties was down 0.50 at 49.30.

Within the telecom sector, China Mobile was down 0.60 at 20.55, China Unicom dropped 0.25 to 5.30, Hutchison Whampoa was down 0.60 at 49.10 and PCCW was down 0.03 at 1.18.

HSBC shed 0.75 at 86.25, Hang Seng Bank was flat at 84.75 and BOC Hong Kong was off 0.05 at 8.00.