Hong Kong index slides on profit-taking

HONG KONG, Dec 7, 2007 (AP) -- Hong Kong's benchmark index tumbled Friday as investors locked in profits from recent gains in property developers.

The blue-chip Hang Seng Index slid 716.45 points, or 2.4 percent, to 28,842.47 after rising as much as 404.01 points in the morning session.

The benchmark measure has risen by 8.6 percent over the last seven sessions as investors factored in a potential interest rate cut by the U.S. Federal Reserve next week.

"Unless we are more confident that the Fed will continue cutting interest rates, I don't see any new reasons for the index to be pushed up above 30,000," said Castor Pang, a strategist at Sun Hung Kai Research.

The Federal Open Market Committee of the U.S. Federal Reserve Bank is widely expected to cut key rates by 50 basis points at its Dec. 11 meeting.

Trade would continue to be volatile over the coming week as investors are worried about the slowdown of the U.S. economy and the impact of the subprime crisis, Peter Lai, a director of DBS Vickers Securities, said.

Property developers fell as investors took profit after their recent rally.

Sino Land fell 9.5 percent to $25.35 Hong Kong dollars, New World Development dropped 7.3 percent to $27.30 Hong Kong dollars and Cheung Kong was down 4.3 percent at $141.40 Hong Kong dollars.

China Mobile fell 2.3 percent to $142.30 Hong Kong dollars.

Bucking the downward trend, PetroChina, which will join the blue-chip index on Monday, gained 1.8 percent to $15.88 Hong Kong dollars. China Shenhua Energy, which also joins the blue-chip ranks on Monday rose 0.9 percent to $49.05 Hong Kong dollars but China Overseas, the third newcomer to the Hang Seng Index, shed 3.2 percent to $18.18 Hong Kong dollars.

China Railway Group made a strong Hong Kong debut and finished at $7.36 $18.18, or 27 percent above its initial public offering price of $5.78 Hong Kong dollars, on expectations of strong demand for infrastructure in China.