* HSI -0.2 pct, H-shares +1 pct, CSI300 -0.2 pct
* HK developers slump on fears of more property curbs
* AgBank, CCB buoyed by positive Q3 earnings
* Rotation from HK property into Chinese banks: dealer
By Clement Tan
HONG KONG, Oct 29 (Reuters) - Hong Kong shares fell on
Monday as local developers tumbled
on fears that new measures to cool soaring property prices will
sap demand, but broader losses were limited by earnings-driven
strength in Chinese banks.
The Hang Seng Index went into the midday trading
break down 0.2 percent at 21,503.8 points, the lowest in more
than a week. The China Enterprises Index of the top
Chinese listings in Hong Kong was up 1 percent.
On the mainland, the CSI300 Index of the top
Shanghai and Shenzhen listings slipped 0.2 percent, while the
Shanghai Composite Index was down 0.1 percent.
"There's some rotation from Hong Kong developers into the
Chinese banking sector after CCB and AgBank posted pretty good
results over the weekend," said Jackson Wong, Tanrich
Securities' vice-president for equity sales.
"I think many are quite surprised by the severity of the 15
percent special duty, so many are taking profits on the sector,
which has done very well this year so far," Wong added,
referring to fresh propery measures announced by the Hong Kong
government after the market closed on Friday.
The government imposed a new 15 percent tax on foreign and
corporate real estate buyers and stiffened the resale stamp duty
fees in the hope of calming the city's property prices, which
have surpassed historical highs hit in 1997.
Shares of New World Development, which before
Monday had jumped more than 100 percent on the year, tumbled 7
percent to their lowest since Oct. 3. It is set for its worst
daily loss since last November.
Sun Hung Kai Properties and Cheung Kong Holdings
each lost more than 5 percent, while Henderson Land
dived 8.1 percent.
But in a report on Monday, Citi analysts said any dip in the
sector repsented "an enhanced buying opportunity", believing
stabilising home prices remove policy risks and asset bubble
OFFSHORE CHINA STRONG ON BANKING SECTOR
Strength in the Chinese banking sector helped the offshore
Chinese markets outperform onshore peers.
China Construction Bank (CCB) rose 1.2
percent and Agricultural Bank of China (AgBank)
jumped 3.1 percent after both followed,
over the weekend, Bank of China (BOC) in posting
positive third-quarter corporate earnings.
Analysts had expected the profitability of banks to be hit
by two central bank interest rate cuts since June. But their
earnings had been supported by China's landmark decision to let
lenders set their own loan rates.
Still, CCB's 12 percent rise in third-quarter net profit
growth lagged AgBank's 16 percent gain and BOC's 17 percent
increase. Bank of China rose 1 percent in Hong Kong on Monday.
China Petroleum and Chemical Corp (Sinopec)
jumped 3.6 percent in Hong Kong and 1.3
percent in Shanghai after posting a smaller-than-expected drop
in third-quarter earnings over the weekend.
A positive China October purchasing managers' index (PMI)
reading, expected on Wednesday, which could further point to a
stabilising of the Chinese economy and buoy investors interest
in the more growth-sensitive sectors, such as Chinese banks.
Data over the weekend showed China's industrial profits rose
7.8 percent in September from a year earlier to 464.3 billion
yuan ($74 billion), the National Bureau of Statistics said on
Saturday, up from a 6.2 percent drop in August.