China, HK stocks fall as slowing services growth, property woes sour mood

SHANGHAI- China and Hong Kong stocks declined on Wednesday as China's slowing services growth added to worries about an economy grappling with a prolonged property slump.

** The Shanghai Composite Index .SSEC dipped 0.1% by the lunch break, while the blue-chip CSI300 Index .CSI300 was flat. Hong Kong's Hang Seng .HSI dropped roughly 1%.

** China's services activity expanded at its slowest pace in five months in November, a private survey released on Wednesday showed.

** The grim services PMI results dampened risk appetite already curbed by financial woes at Chinese property giant Vanke 000002.SZ, 2202.HK.

** "There's not enough money flowing into the market," Topsperity Securities said in a report. Investors are awaiting policy stimulus and "inadequate liquidity limits the market upside."

** Property shares continued to sink, after Fitch Ratings on Tuesday placed Vanke - which seeks to delay payment on an onshore bond due this month - on "Rating Watch Negative", and downgraded its subsidiary's notes.

** Vanke's Shenzhen-listed shares 000002.SZ lost 1.7% to the lowest level since September 2008, while its Hong Kong-traded stock 2202.HK edged 0.3% lower.

** China's CSI300 Real Estate Index .CSI000952 fell 1.3% to a 14-month low, while Hong Kong's Hang Seng Mainland Property Index .HSMPI weakened 0.6%.

** China's CSI Rare Earth Industry Index .CSI930598 rose 1% after a Reuters report that China had issued the first batch of new rare earth export licences that should accelerate shipments to certain customers.

** Chinese magnet makers that have secured licenses for their clients, including JL Mag Rare Earth 300748.SZ, Ningbo Yunsheng 600366.SS and Beijing Zhong Ke San Huan High-Tech 000970.SZ rose.

** Metal producers .CSISNMIM and materials makers .CSI000909 also climbed after local media reports that some key material suppliers to lithium battery makers have raised prices thanks to booming demand for energy storage, and China's campaign against excessive competition and price wars.

Shanghai Newsroom/Reuters