Local Shares Lose Ground On Profit-taking

Hong Kong stocks closed with losses on Monday, reversing an early rally, with profit-taking setting in following last week's gains.

The Hang Seng Index slipped 0.96 percent, or 245 points, to 25,177.

Mainland telecoms giant China Unicom suffered the biggest drop on the index, with its shares plunging more than 4 percent.

The benchmark Shanghai Composite Index eased 0.24 percent, or 8.13 points, to 3,395, while the Shenzhen Composite Index on China's second exchange shed 0.44 percent, or 10.13 points, to 2,295.

Asian markets also fell as investors struggled to maintain their early momentum following another record lead from Wall Street.

Profit-taking kicked in after last week's US Federal Reserve-induced surge. The US central bank's pledge of trillions of dollars in support to keep financial markets going has been key to a surge in equities from their March troughs, with the tech-rich Nasdaq almost doubling in that time as people stay home.

And boss Jerome Powell's speech on Thursday, marking a shift in the Fed's inflation policy, hammered home that promise, helping fire the S&P 500 and Nasdaq to more record highs. The Dow also advanced to erase all its losses for the year to date.

"With a low, neutral Fed funds rate, a de-emphasis of inflation overshoots and a focus on employment, monetary policy will be highly stimulative for a long, long time. Indeed, music to the stock market's ears," said Stephen Innes at AxiCorp.

Seoul and Taipei each shed more than one percent on Monday. Sydney, Mumbai, Jakarta and Singapore were also in the red.

Tokyo rose more than one percent, though, after losing more than one percent Friday in reaction to Japanese Prime Minister Shinzo Abe's resignation.

While the news fanned fears of uncertainty in the country, analysts said no major confusion is expected with reports saying his right-hand man Yoshihide Suga is set to stand as his successor. (AFP)