HK shares shed 1.9 pct on busiest day in 8 years

REUTERS HK shares shed 1.9 pct on busiest day in 8 years [GQXGFBJ]
(Updates with lunch close, details) By Edwin Chan

HONG KONG, Jan 4 (Reuters) - Hong Kong shares fell on Thursday after relishing record highs in each of the past five sessions, as investors cashed out and dumped energy stocks such as PetroChina Co. Ltd. <0857.hk> because of sliding oil prices.

Energy stocks ranked among the most heavily traded, on a day when overall turnover soared to HK$76.51 billion (US$9.83 billion) -- the highest turnover posted since Aug. 28, 1998. Analysts, calling the share retreat a much-needed correction, expect the market to stumble through a consolidation for days or even weeks to come before essaying another rally.

Top Asian oil producer PetroChina and smaller rival CNOOC Ltd. <0883.hk> tanked about 4 percent, mirroring losses among Asian peers after oil dropped 4 percent to below $59 a barrel on Wednesday, driven down by mild U.S. weather.

The benchmark Hang Seng Index <.HSI> fell to 20,025.58 as a morning slide steepened, just a day after setting a life's high of 20,554.58 on Wednesday.

Hong Kong-listed Chinese companies <.HSCE> -- star performers over the past week amid speculation that more of the nation's corporations listed in the city would seek mainland listings -- dived 3.9 percent to 10,347.67. "These kinds of gyrations, we've been expecting all along. The overall market was lifted higher not by fundamentals, but by speculation and short-term punting," said Alex Tang, research director at Core-Pacific Yamaichi.

"Major players are offloading their shares, and the sharp decline reflects profit-taking," he said, adding that the main index should find support at 19,500.

PetroChina fell 4.3 percent to HK$10.60 and CNOOC drifted 3.7 percent lower to HK$7.20. Refining giant Sinopec Corp. <0386.hk> <600028.hk>, the third of China's triumvirate of energy producers, held up better with a milder 0.68 percent slip to HK$7.27, after climbing 4 percent in the morning on the prospect of improved crude processing margins.

Hutchison Telecommunications <2332.hk> dived 5.6 percent to HK$18.76 despite news that India's Hinduja Group had joined Vodafone Group Plc. and Reliance Communications Ltd. in courting its Indian unit, Hutchison Essar Ltd.

But Hutchison Telecom is still up more than 10 percent from the start of December, when talk of competing bids for its majority-owned Indian arm began circulating. Please click on [nBOM138393] for a full story.

Industrial and Commercial Bank of China <1398.hk> <601398.ss> dived 4.3 percent to HK$4.93. It racked up a record high of HK$5.18 on Wednesday.

That run followed news that China's largest lender had agreed to buy 90 percent of PT Bank Halim Indonesia in its first overseas acquisition.

SMIC <0981.hk>, the world's third-largest microchip foundry, backpedalled 1.6 percent to HK$1.21 after having risen some 21 percent in the few sessions since the start of the year. Its U.S. stock surged 22 percent on Wednesday, which a Bank of America analyst attributed to talk it could become a takeover target.

Other analysts said SMIC's rally pointed to nothing other than rotational buying into a long-underperforming manufacturing sector.