Hang Seng Index falls for a third straight session

Hong Kong stock pared early gains and dropped 1.97% on Tuesday, a third straight session, driven by sinking mainland stock market and a prevailing caution ahead of a series of blue chips' earning reports this week.

Hang Seng Index, the benchmark, opened slight higher at 23,858.04 points in the morning session, but lacked support to extend its rally during trading. After fluctuating between 23,060.90 and 23,923.20 points, the blue-chip Hang Seng Index slid 465.1 points, or 1.97% over the previous trading day to close at 23,119.87. Mainboard turnover finished up slightly to HK$84.12 billion (US$10.78 billion) from HK$81.12 billion (US$10.4 billion) on Monday.

Hang Seng China Enterprise Index, which tracks the overall performance of 43 Chinese mainland state-owned enterprises on Hong Kong Stock Exchange, dropped below the key 13,000 mark by losing 467.71 points or 3.48% to 12,972.21 points, following the slump on the A-share market.

Hong Kong's property stocks were among the biggest losers. Sun Hung Kai Properties Ltd<16>, the largest house developer in Hong Kong, decreased 2.47% to HK$130.3. Henderson Land Development Company Ltd.<12> skidded 1.02% to HK$58.1. Cheung Kong (Holdings) Limited<1>, one of Hong Kong's largest real-estate developer owned by business giant Li Ka Shing, lost 1.83 % to HK$112.5. Sino Land Company Ltd<83> dropped 3.37% to HK$18.94.

Mainland's banking and insurance stocks listed on the Hong Kong Exchange all hit three-week lows, following the reports on their exposure of subprime mortgage in the U.S. The Industrial and Commercial Bank of China<601398><1398>, the largest lender in the country, shed 2.26% to HK$5.20. China Construction Bank<601939><939>, the third-largest bank by market value, tumbled 2.58% to HK$5.67. Bank of China<601988><3988>, the second-largest bank, fell 2.15% to HK$3.18. Bank of Communication<601328><3328> registered a decrease of 3.16% to HK$8.88, despite the firmness of its shareholder, market heavyweight HSBC Holdings Plc<5> outperformed yesterday by rebounding 0.92% to HK$120.4 after it announced a 21% increase of 2007 profit report.

China Life<601628><2628>, the country's largest life insurer, fell 3.65% to HK$ 29.0. Ping An Insurance (Group) Co<601318><2318> slumped 4.68% to HK$56.0. PICC P&C<2328> lost 4.57% to HK$7.93.

Among resources stocks, oil companies all skidded after the crude oil price hit US$103 a barrel in global market. PetroChina<601857><857>, the country's largest oil producer, dropped 3.91% to HK$10.82. CNOOC<883>, China's largest offshore oil company, lost 4.42% to HK$12.12. Sinopec <600028><386>, Asia's largest refiner, plunged 5.29% to HK$8.05.