HK shares pare early decline to end down 1.2pc

HONG KONG, Dec 19 (Reuters): Hong Kong shares finished lower Monday, with some investors seen covering short positions, helping to pare losses in the afternoon that had earlier accelerated after news that North Korean leader Kim Jong-il had died, adding to caution in already-weak markets. The Hang Seng Index closed down 1.18 per cent at 18,070.21. The China Enterprises Index of top mainland companies listed in Hong Kong ended down 1.42 per cent at 9,727.08. The Shanghai Composite Index pared early losses to close down 0.3 per cent at 2,218.24, bouncing off a 33-month intraday low in lacklustre A-share turnover. Monday's close offset much of last Friday's gains made on speculation that Beijing could intervene over the weekend to support the financial markets. Money managers and traders told the reporter they did not expect uncertainty from North Korea to impact Hong Kong and China markets too adversely, although they were keeping a watchful eye on unfolding events. Chinese property and financial counters, which led gains last Friday largely on a bout of short-covering, were the leading percentage losers Monday. Data over the weekend showed that China's November housing prices increased at the slowest rate in the year to date while housing inflation hit the lowest as tightening efforts took affect.