August 15, 2017 / 8:53 AM / a year ago

Hong Kong shares fall on late profit taking

SHANGHAI, Aug 15 (Reuters) - Hong Kong shares finished down on Tuesday, falling late in the session after profit-taking pressures overcame support from a strong performance in banking shares.

The Hang Seng index fell 0.3 percent, to 27,174.96 points, while the China Enterprises Index gained 0.3 percent, to 10,738.00 points.

The China Enterprises Index had earlier risen as much as 1.4 percent in the morning session, and the Hang Seng index rose as much as 0.7 percent.

The declines interrupted what looked like a continuation of Monday’s market rebound, following losses in global shares last week amid fears over rising tensions between the United States and North Korea.

Those tensions eased further on Tuesday after North Korean state media reported that the country’s leader had delayed a decision on firing missiles toward Guam.

But investors in Hong Kong, who are looking to results from companies that have yet to release in the ongoing earnings season, chose to close positions and take profits late in the day, dragging the index down, said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. Property and resource firms were particular targets, he said.

China Shenhua Energy Co Ltd fell 3.9 percent and Wharf Holdings Ltd lost 3.3 percent.

Providing market support for most of the trading day, bank stocks strengthened after a statement from China’s banking regulator late on Monday said first-half profits for commercial lenders rose nearly 8 percent from the same period in 2016, while the level of non-performing loans (NPLs) in June did not increase from March.

Yip said Beijing’s attempts to rein in lending have helped to improve interest rate spreads and could bolster the health of the sector.

Industrial and Commercial Bank of China Ltd was the strongest index component, rising 2.8 percent. China Construction Bank Corp, which rose 1.1 percent and Bank of China, which rose 1.6 percent, were also among the top five gainers in the index on Tuesday.

The three banks are also listed in Shanghai, where they recorded strong gains for the day.

The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 129.05.

A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa. (Reporting by Andrew Galbraith; Editing by Jacqueline Wong)

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