Hong Kong Stocks Drop in Longest Losing Streak in Two Months

By Hanny Wan

Jan. 12 (Bloomberg) -- Hong Kong’s benchmark stock index fell for a fifth day, its longest losing streak in more than two months, as the deepening global recession damps demand for oil and prices of homes in China declined.

PetroChina Co., the nation’s largest oil company, lost 4.8 percent. Agile Property Holdings Ltd., a Chinese developer, tumbled 14 percent after home prices fell for the first time on record. Bank of China Ltd. dropped 6.1 percent after the nation’s banking regulator said it will tolerate an increase in bad debt this year. Foxconn International Holdings Ltd., the world’s largest contract maker of mobile phones, plunged 8.8 percent on concerns demand will slow after U.S. unemployment rose to an almost 16-year high.

“Clearly the numbers are bad at the moment,” Richard Urwin, head of asset allocation at BlackRock Investment Management, said in a Bloomberg Television interview. “In the second half of the year, we think there will be some modest tailwind behind the global economy.”

The Hang Seng Index lost 406.44, or 2.8 percent, to close at 13,971.00, extending its drop in the past five sessions to 10 percent. That was the gauge’s longest losing streak since the five days ended Oct. 27. It tumbled 48 percent last year, the most since 1974.

The benchmark index has fallen 2.9 percent this year amid signs the global economic slump is deepening. The U.S. Labor Department reported Jan. 9 that the nation lost 2.589 million jobs in 2008, pushing the unemployment rate to 7.2 percent in December. It was the highest level in almost 16 years.

The Hang Seng China Enterprises Index, which tracks Chinese companies’ so-called H shares, declined 5.3 percent to 7,311.23.

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