Hong Kong shares end morning lower on renewed U.S. credit, housing woes UPDATE

Hong Kong shares ended the Friday morning session lower, as the bigger-than-forecast decline in home sales and rising number of jobless citizens in the United States revived fears of the credit crisis.
The National Association of Realtors said existing home sales fell by 2.6 percent in June from a year ago, the lowest in a decade and more than the 1 percent drop economists have expected. That prompted investors to sell U.S. equities overnight.
Adding to the gloom, the Labor Department said the number of workers filing for unemployment benefits rose to 406,000 last week, an increase of 34,000 seasonally adjusted, the highest since the aftermath of the Gulf Coast hurricanes in 2005.

"The subprime credit crisis is far from over," said Jackson Wong, investment manager at Tanrich Securities. "The drop in housing sales is a constant reminder that the problems are still there even after the administrative measures adopted by the U.S. government."

Washington has bailed out the nation's biggest mortgage financiers Fannie Mae and Freddie Mac, giving investors an excuse to hunt for bargain U.S. stocks in the past few days. Wall Street's rally has spilled over to Asian markets, including Hong Kong, with the key index hitting its highest level in five weeks on Wednesday.
The Hang Seng Index lost 446.68 points or 1.9 percent to end the session at 22,641.04.

China Shenhua Energy, the biggest coal producer in the mainland, led the index lower after the government capped thermal coal prices further and tightened supply distribution. The Chinese government also warned it would punish those who are engaged in hoarding and price speculation.
China Shenhua Energy, the biggest coal producer in the mainland, led the index lower after the government capped thermal coal prices further and tightened supply distribution. The Chinese government also warned it would punish those who are engaged in hoarding and price speculation.