HONG KONG (NewsRise) -- Hong Kong stocks retreated from their highest level since August 2015 as investors wary over rising valuations and the Federal Reserve's policy outlook locked in some gains.
The Hang Seng Index slipped 0.4% to 24,114.86 after moving in a narrow 171-point range during the session, with energy producers among the day's decliners, while casino operators and some property developers advanced. The Hang Seng China Enterprises Index, also called the H-share index, slipped 0.2%. Turnover on the local stock exchange's main board weakened to under HK$82 billion ($10.5 billion) from an average of HK$92 billion over the previous 10 days.
Minutes of the Fed's last meeting, where the central bank left interest rates unchanged after raising borrowing costs in December, showed policy makers leaning toward more tightening at a gradual pace, even as they appeared to be uncertain about any impact from Donald Trump's economic policies.
The Hang Seng and H-share indexes have climbed at least 9.6% this year on a stable yuan, improving flows from mainland investors and optimism the U.S. would cut taxes for individuals and businesses. While their valuations are still lower than for the Shanghai Composite Index and the S&P 500 Index, momentum indicators are signaling they've risen too fast in the short-term.
"I think Hong Kong markets may see a bit of sideways consolidation around the 24,000 level until the current overbought technical conditions are corrected," said Daniel So, strategist at CMB International Securities. "The overall trend, however, remains upbeat and downside corrections may be limited."
Trading activity was muted in Asia following mixed cues from Wall Street indexes overnight, with the Nikkei Asia300 Index trading little changed at 1,136.85.
In mainland markets, the Shanghai Composite slipped 0.3% to halt a three-day rising streak, while the Shenzhen Composite Index ended little changed. The yuan was little changed against the dollar at 6.8767.
Sands China, one of the Hang Seng Index's worst performers this month, advanced 1.4% as investors looked beyond the gaming company's decline in December-quarter earnings. Its peer Galaxy Entertainment Group gained 1.9%, erasing losses accumulated earlier in the week.
New World Development rose 3.3%, extending gains following Wednesday's upbeat earnings report. A gauge of real estate companies listed in the city rose for a fourth day on growing confidence local property prices will be able to weather an outlook for higher rates. Hong Kong's financial secretary on Wednesday reiterated a proposal to increase land supply in his budget for the year starting April 1, but refrained from adding any curbs on the sector to cool housing prices.
"I think the property stocks are benefitting from sector rotation and are playing catch up," So said. "Also, yesterday's budget did not have any additional tightening measures and this is also helping the rally."
Hong Kong property developers had tumbled late last year after the government raised the stamp duty on all purchases other than by local first-time buyers.
China Mobile is boosting preparations for a 5G telecommunications network, based on technologies from ZTE and Qualcomm Technologies, South China Morning Post reported. Its stock fell 1.3% Thursday, paring its year-to-date advance to 5%. Shares of ZTE advanced 1.1%.
Glencore reported a net income of $1.38 billion for 2016 at the end of the day's trading. Its shares closed at HK$31.60 on Wednesday, before the mining giant requested a trading halt.
Citic Securities, a unit of Citic, slipped 0.5%. The company was among Chinese buyers who were readying a 246-million-pound ($307 million) bid for the Southampton soccer club, Reuters reported, citing a person with knowledge of the plans.
-- Nimesh Vora