Hong Kong shares fell more than 1 percent yesterday, mirroring losses in regional markets amid continued tension over North Korea, and as investors booked profits after recent gains.
The Hang Seng Index ended down 1.1 percent at 27,444 points, while the China Enterprises Index lost 1.7 percent to 10,782.20. Market turnover was HK$121.9 billion.
The losses reflected profit-taking and increased caution among investors as tensions rose between the United States and North Korea, said Sam Sam, an analyst with South China Financial in Hong Kong.
"The Hang Seng Index has gone up by quite a lot so far this year - the drop yesterday might be an adjustment as some investors decide to take profits," said First Shanghai Securities chief strategist Linus Yip Sheung-chi. "We think the outlook of the market is still positive."
Wharf Holdings (0004) fell sharply, losing 7 percent to close at HK$74.05 yesterday.
On Wednesday, Wharf shares surged 14 percent to a record high close of HK$79.65 on news that Wharf Real Estate Investment Co Ltd would submit an application for a separate listing on the main board.
Shares of Hang Seng Bank (0011) rose 1 percent to $176.3 yesterday as JPMorgan expects Hang Seng Bank's profit will continue to improve.
Wanda Hotel Development (0169) was one bright spot, surging 19.8 percent to HK$1.39, its highest level in nearly two years.
Meanwhile, China's central bank yesterday set the yuan midpoint at the highest level in 10 months, 6.6770 per dollar.
The Hong Kong dollar also strengthened slightly against the US dollar to 7.81470 yesterday as the Hong Kong Monetary Authority said it would sell HK$40 billion of additional exchange fund bills.
Gold hit a two-month high of US$1,285.90 an ounce yesterday evening.