Hong Kong close 1.74% lower on profit-taking

Special Report:
Global Financial Crisis

HONG KONG, May 11 (Xinhua) -- Hong Kong stocks shed 301.92 points, or 1.74
percent to close at 17,087.95 at the end of Monday trading, as investors rushed
to take profit gained during the seven-day rally starting on April 30.

The benchmark Hang Seng Index opened slightly lower at 17,381 and advanced
to the day high of 17,685.64 before moving downward to the day low of 17,032.44.
The market retrieved some ground upon closing.

Market turnover expanded to 92.13 billion HK dollars (11.90 billion U.S.
dollars), from Friday's 86.77 billion HK dollars (11.21 billion U.S. dollars).

Analysts say the market could face further consolidation as economic
fundamentals are not good enough to support the current market level.

Aside from profit-taking, the Hong Kong market was thought to be dragged
down by China's mainland bourses, which moved into negative territory after days
of considerable gains.

The Chinese government said the country's main inflation index fell 1.5
percent year-on-year in April, a result much better than anticipated.

However, the good news seemed unable to lend any momentum to the retreating
stock market, with the Shanghai Composite down 1.8 percent and the Shenzhen
Component Index down 3.09 percent.

Heavyweight HSBC gained 0.3 percent to 66.1 HK dollars, among other
constituents that defied the down trend.

China Mobile dropped 1.2 percent to 75.3 HK dollars and another telecom
service provider China Unicom rose 0.11 percent to 9.25 HK dollars.

Shoe maker Yue Yuen plunged 7.2 percent to 16.07 HK dollars after news that
the company would be kicked out of the Hang Seng Index and replaced by
electricity producer China Resources Power Holdings on June 8.

Financial stocks fell cross the board. China's biggest lender ICBC slid 1.9
percent to 4.71 HK dollars, Bank of China lost 2.37 percent to 2.88 HK dollars
and Bank of Construction fell 6.7 percent on concerns Bank of America will sell
shares in the company.

The property sector was also down. Henderson Land 5.2 percent to 37.6 HK
dollars, Cheung Kong down 1.8 percent and New World Development down 2.1.

Utilities stocks failed to buckle the market fall, with HK Electric down
0.71 percent and MTR Corporation down 5.37 percent. (7.7420 HK dollars = 1 US
dollar)