* HK shares decline for 8th successive session
* Shanghai Composite down 1.1 percent, brokerages weak
* HK developers slip after new round of govt measures
* HK, Shanghai benchmarks near key chart supports
(Updates to midday)
By Vikram Subhedar and Yixin Chen
HONG KONG/SHANGHAI, June 13 (Reuters) – Hong Kong and China
shares extended their decline on Monday morning as banks, energy
and property counters pulled the benchmark indexes close to
strong near-term supports.
The Hang Seng Index fell to its lowest in nearly
three months, down 0.78 percent at 22,245.98 by the midday
trading break. The index recouped some of its earlier losses
after testing a level close to its March low of 22,123.3,
suggesting the index could find support here.
On the mainland, the Shanghai Composite Index
dropped 1.11 percent, led by property and brokerage operators
and hit by lingering worries over domestic inflationary
pressure.
China’s annual inflation rate in June may accelerate to more
than 6 percent, which could bring the full-year consumer price
index for 2011 to as high as 5 percent, a government researcher
said in remarks reported on Sunday.
Weak overseas markets, particularly in the United States,
and concerns of slowing property sales in Hong Kong after
another round government measures to rein in prices could keep
the market under pressure, said Alan Lam, greater China analyst
at Julius Baer.
Hong Kong imposed new measures last Friday in its fourth
attempt since October 2009 to damp runaway property prices,
increasing the supply of land available to build homes and
tightening mortgage restrictions.
The measures took a bite out of the share prices of local
developers, with the sector sub-index down 1.45 percent.
Industry bellwethers Cheung Kong (Holdings) Ltd
and Sun Hung Kai Properties Ltd fell 1.2 percent and
1.4 percent respectively.
Oil counters slid as concerns over U.S. economic growth
combined with expectations that top exporter Saudi Arabia would
increase output pressure on crude oil prices.
CNOOC Ltd fell 1.8 percent and was the top drag on
the benchmark. PetroChina Co Ltd fell 1.7 percent.
SHANGHAI WEAK, B-SHARE TUMBLE CONTINUES
The benchmark Shanghai Composite Index dropped to
2,675.1 points by midday, extending a 0.8 percent loss over the
week last week and hovering around a four-month low.
Analysts said investors expect the central bank to raise
interest rates in the near term because of persistently high
inflation, which will cap gains on the share index.
“The central bank didn’t raise interest rates over the
weekend, so the market continues to be concerned about high
inflation,” said Nanjing Securities analyst Wen Lijun.
The sub-index of property shares retreated 1.2
percent.
China Vanke Co Ltd , the country’s largest
developer by sales, dropped 1.6 percent, while Guoxing Rongda
Real Estate Co Ltd tumbled 6.2 percent.
Almost all 14 security houses listed in Shanghai and
Shenzhen fell. Haitong Securities Co Ltd lost 2.1
percent and GF Securities Co Ltd dropped 2.5 percent
as trading activity dwindled.
Turnover by midday was 37 billion yuan ($5.7 billion), much
lower than Friday’s 42 billion yuan.
China’s main stock index for hard-currency B-shares slumped
nearly 5 percent in morning trade, but pared losses to stand at
241.1 points, down 3.5 percent at mid-session.
Foreign share holders sold on concern over a U.S. regulatory
warning about the risks surrounding Chinese companies that have
listed there through reverse mergers.
(Editing by Chris Lewis)