Hong Kong Stocks Fall to 5-Month Low; Cnooc, Chalco Lead Drop

By Hanny Wan

Aug. 15 (Bloomberg) -- Hong Kong stocks fell, dragging the benchmark index to its lowest in almost five months, led by commodity producers after oil and metals prices dropped.

Cnooc Ltd., China's biggest offshore driller, led oil companies lower. Zijin Mining Group Co., owner of China's largest gold mine, retreated after bullion tumbled to less than $800 an ounce. Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, declined after Credit Suisse Group cut its 2008 profit estimate by 52 percent.

``Investors should be avoiding raw materials,'' said Castor Pang, a strategist at Sun Hung Kai Securities in Hong Kong. ``Demand is falling along with a slowing economy and prices are likely to keep dropping.''

The Hang Seng Index lost 232.13, or 1.1 percent, to close at 21,160.58, its lowest since March 20 and extending its losses this week to 3.3 percent. The measure has declined 24 percent this year as soaring fuel and food prices threatened consumer spending and corporate profits, while writedowns and credit losses at financial companies topped $500 billion.

The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, fell 0.7 percent to 11,170.20.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net