Hong Kong¡¯s Stock Index Falls on U.S. Profits, Economy Concerns

July 19 (Bloomberg) -- Hong Kong stocks fell, dragging the benchmark index to the lowest level in more than a week, after companies including Bank of America Corp. and Citigroup Inc. reported lower revenue and U.S. consumer confidence dropped.

Li & Fung Ltd., the biggest supplier to retailers including Wal-Mart Stores Inc., dropped 2.6 percent. Aluminum Corp. of China Ltd., China’s largest maker of the metal, slid 2.3 percent after metal prices declined. Zijin Mining Group Co. lost 3.7 percent after China’s largest gold producer said investigators found a “substantial leakage of waste water” at a copper plant in Fujian province.

“Poor consumer sentiment and lackluster company earnings will undermine a U.S. recovery and hint at a slowdown in the economy,” said Benjamin Tam, a portfolio manager at IG Investment Ltd., which oversees $1 billion. “This will put pressure on exporters in Hong Kong.”

The Hang Seng Index slid 0.8 percent to 20,090.95, its lowest close since July 8.

The Hang Seng China Enterprises Index of so-called H shares of Chinese companies lost 1 percent to 11,310.70.

The Hang Seng Index has dropped 8.2 percent this year as China’s efforts to cool its property market and Europe’s debt crises dented confidence in a global economic recovery. Stocks on the gauge trade at 13.3 times estimated earnings, Bloomberg data show, down from 17.2 times at the beginning of the year.

U.S. Earnings Disappoint

Twenty-nine stocks fell for eleven that rose among the measure’s 43 constituents. Futures on the index slid 0.8 percent to 20,026.

Li & Fung dropped 2.6 percent to HK$35.55. Esprit Holdings Ltd., a global fashion retailer, fell 2.2 percent to HK$42.50. HSBC Holdings Plc, which made 20 percent of its 2009 revenue in North America, retreated 2.3 percent to HK$73.95.

Bank of America Corp., the largest U.S. lender, reported second-quarter revenue declined 11 percent to $29.15 billion from a year earlier.

Citigroup, the third-biggest U.S. bank, said second-quarter net income fell 38 percent to $2.73 billion, while revenue was $22.1 billion, down 33 percent from a year earlier.

“These U.S. data add to the public concerns that the global economy is slowing and adds to the risk of a double dip recession,” said Kelvin Lau, an economist at Standard Chartered Bank. “With Asian countries now focused on curbing overheating in their economies, Asia can only adjust its policies and lift the world economy towards the second half of the year.”

Zijin Mining Leak

Chalco, as Aluminum Corp. is known, slid 2.3 percent to HK$6.02. Jiangxi Copper Co., China’s largest producer of the metal, fell 0.8 percent to HK$15.06.

The London Metal Exchange Index of six metals including copper and aluminum declined 2.4 percent on July 16.

Zijin Mining lost 3.7 percent to HK$4.47. The stock has fallen more than 10 percent in the past three days. The Fujian plant has been closed, the company said. Three of the plant’s managers were detained by police. Two of the managers had already been suspended from duties.

Dalian Port (PDA) Co., operator of China’s largest crude- oil terminal, sank 5.1 percent to HK$3, the biggest drop since May 19. PetroChina Co., the nation’s largest oil producer and the operator of the pipelines where the accident took place, fell 1.4 percent to HK$8.46.

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