6:00AM New York, 6:00PM Hong Kong - Retail sales advance 21.6% in May. Hang Seng plunges 1.87 in today’s trading and 7.4% for the week.

Hong Kong stock indexes fell despite strong rise in retail sales in May after rising oil prices reinforced the uncertainty over the health of global market.

Market sentiment

In Hong Kong trading Hang Seng Index fell 1.87% or 431.56 at 22,592.30, falling 7.4% for the week, and the China Enterprises Index of Hong Kong listed mainland stocks slipped 2.47% or 309.77 to 22,213.12. In Shanghai trading, CSI 300 Index plunged 3.42% or 105.52 at 2,979.12.

Daily turnover on main-board was HK$59.07 billion from HK$77.4 billion yesterday.

China’s FDI rises 54.9% in the first five months

China’s Ministry of Commerce reported yesterday that foreign direct investment in the first five months of the year gained 54.9% to $42.78 from the same period a year ago. Newly approved foreign-funded enterprises dropped 20.95% to 11,915 in the review period.

FDI climbed 37.94% to Rmb7.76 billion in May, while the number of newly approved foreign funded enterprises declined 10.94% to 2,425.

China Commerce Minister recently said increasing FDI reflects investor confidence and a trend of accelerating investment in the country to capitalize from the appreciating currency.

[Retail Sales increase 21.6% in May

Xinhua News Agency reported today that the National Bureau of Statistics said retail sales jumped 21.6% to Rmb870 billion from the same month a year earlier. Also in the first five months of the year sales rose 21.1% year-on-year to Rmb4.24 trillion.

Separately, the People’s Bank of China said yesterday the broad measure of money supply, M3, which covers cash in circulation plus all deposits, rose 18.07% to Rmb43.62 trillion from a year earlier in May. Also the narrow measure of money supply, M1, increased 17.93% to Rmb15.33 trillion.

Household local-currency deposits rose by Rmb236.9 billion in May from a decline of Rmb 278.4 billion a year earlier.

Outstanding local-currency loans gained 14.86% to Rmb28.29 trillion and those in foreign currencies grew 55.39% to US$273.9 billion.

Foreign-currency deposits slipped $2.1 billion from an increase of $4.8 billion a year ago.

Gainers & Losers

Hong Kong fell on profit taking as uncertainty stemming from rising inflation and slowing growth pervaded the market. HSBC Holdings declined 1.4% and China Mobile fell 2.5%.

Losses in financial stocks widened as the move by Beijing to increase the reserve requirement ratio continued to take its toll. Bank of Communications edged down 2% and China Construction Bank plummeted 2.8%.

Insurance companies China Line and Ping An Insurance shed 2.5% and 3.2% respectively.

Property stocks fell as well. Cheung Kong Holdings edged down 3.1% and Sino Land dropped 5.5%.