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Hong Kong shares close down 0.45%, Shanghai on three-year high

Hong Kong remains the world's freest place to do business, according to an annual report published Wednesday/AFP

Hong Kong skyline/AFP

HONG KONG, November 27- Hong Kong stocks fell 0.45 percent Thursday, while China’s benchmark Shanghai Composite Index ended on its highest close in more than three years.

The Hang Seng Index fell 107.70 points to 24,004.28 on turnover of HK$72.888 billion (US$9.4 billion) ahead of a Organization of the Petroleum Exporting Countries (OPEC) meeting on quotas.

Expectations are that the cartel will keep production at present levels despite pressure over falling prices.

“Oil prices continued to struggle in Asia with investors unconvinced output cuts can be agreed to support prices,” said IG in comments carried by Dow Jones.

Confidence was also dimmed by an unexpected drop in Chinese industrial profits.

But in China, the benchmark Shanghai Composite Index gained 1.00 percent, or 26.15 points, to 2,630.49 on turnover of 339.0 billion yuan ($55.2 billion).

The close was the highest since August 4, 2011, when the index ended at 2,684.04 points.

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, rose 0.75 percent, or 10.52 points, to 1,416.18 on turnover of 270.6 billion yuan.

Chinese shares extended gains as the market continued to bask in an interest rate cut with expectations of further easing to boost the economy, dealers said.

China’s central bank last week unexpectedly cut deposit and lending rates, fuelling hopes that more monetary easing will follow, analysts said.

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“Financial stocks continued to get a boost from the rate cut and expectations of further easing,” Shenyin Wanguo Securities analyst Qian Qimin told AFP.

Funds released from unsuccessful subscriptions for new share offers had also returned to the market, boosting liquidity, he added.

In Shanghai, Everbright Securities soared by its 10 percent daily limit to 18.77 yuan, Ping An Insurance gained 2.01 percent to 48.84 yuan and banking giant ICBC edged up 0.26 percent to 3.83 yuan.

Defence firms rose on speculative buying. China First Heavy Industries surged 10 percent to 4.48 yuan while Hafei Aviation Industry advanced 2.77 percent to 37.51 yuan.

In Hong Kong, HSBC closed down 0.51 percent at HK$77.55, China Mobile fell 0.99 percent to HK$94.95, with Cathay Pacific Airways ending up 1.25 percent at HK$16.26.

— Dow Jones contributed to this report —

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