Reply #31: HK stocks fall in choppy session, insurers hit again [View All]

[Ghost Dog]

HONG KONG, Jan 31 (Reuters) - Hong Kong stocks dropped on
Thursday, reversing opening gains amid a barrage of bad news,
ranging from China's ongoing weather-related problems to possible
credit downgrades of top U.S. bond insurers.

Worries that bad weather would inflict costly damage knocked
mainland insurers, while China Life (2628.HK: Quote, Profile, Research), the country's top
life insurer, reeled further after delivering a negative earnings
surprise this week.

Coal stocks slid as investors sought to lock in profits
following their recent rally and after Goldman Sachs downgraded
the sector .

"The market is in a negative direction and very news-driven,"
said Peter Lai, director at DBS Vickers. "Sentiment is
pessimistic because of the bad weather in mainland China and
subprime problems in the U.S."

Overnight, credit crunch fears resurfaced following
speculation on a financial television network that two top U.S.
bond insurers would lose their top credit rating. Ratings agency
Standard & Poor's said on Wednesday it cut or may cut its rating
on up to $534 billion of subprime bonds .

Trading was volatile after stocks reversed a firm start,
although losses narrowed as bargain hunters stepped in after
China names shed more than 4 percent.

The benchmark Hang Seng Index .HSI had fallen 0.7 percent
to 23,484.00 by lunch. The China Enterprises Index of Hong
Kong-listed mainland companies , or H shares, tumbled 2
percent to 12,499.29.

/... http://www.reuters.com/article/marketsNews/idCAHKG13360820080131?rpc=611