Hong Kong stocks drop sharply on banks, resources

LOS ANGELES (MarketWatch) -- Hong Kong stocks plowed sharply lower in early Thursday trading, with banking and resource shares among the leading decliners. The Hang Seng Index HK:HSI -0.83% fell 1.1% to 21,210.43, with mainland Chinese shares also weak as the Hang Seng China Enterprises Index lost 1.6% and the Shanghai Composite Index CN:000001 -0.31% fell 0.6%. Bank stocks marched lower after their U.S. peers sold down amid growing concerns about the U.S. "fiscal cliff" of potential tax hikes and spending cuts. Top Hang Seng Index component HSBC Holdings PLC HK:5 -0.47%HBC -1.00% lost 0.9%, while Agricultural Bank of China Ltd. HK:1288 -1.48% ACGBF -2.63%fell 2.1%, ICBC lost 1.6%, and Bank of Communications Co. HK:3328 -1.46% BKFCF +9.23%retreated 1.8%. Energy shares also dropped, with China expected to cut retail fuel prices soon. Cnooc Ltd. HK:883 -0.62% CEO -0.26% fell 1.3%, China Petroleum & Chemical Corp. (Sinopec) HK:386 -0.50% SNP +0.33% gave up 1.8%, and PetroChina Co. HK:857 -0.39%PTR +0.05% traded 1% lower. Metal shares did even worse, despite a mixed performance for commodities overnight, with Aluminum Corp. of China Ltd. HK:2600 -1.51% ACH -0.38%dropping 2.7%, and Angang Steel Co. HK:347 -1.50% ANGGF -3.85% lower by 2%. Meanwhile, shares of Internet major Tencent Holdings Ltd. HK:700 -4.56% TCTZF -3.71%plunged 5.3% after the firm's third-quarter results missed expectations, but stock in clothing maker Esprit Holdings Ltd. HK:330 +20.72% ESHDF -3.33% rocketed 22.4% higher after its former chairman Michael Ying raised his stake in the company.