Hong Kong stocks fell for an eighth day as US economic reports and falling commodity prices hit investor confidence in global recovery.

The Hang Seng Index (HSI) fell 0.4 percent to 23159.14 at the close, its longest losing streak since April 2003. Four stocks fell for every three that rose in the 45-member index. The gauge declined 2.4 percent for the week. The Hang Seng China Enterprises Index gained 0.3 percent to 12848.82.

Li & Fung slid 0.6 percent to HK$36.55, while HSBC sank 1.4 percent to HK$82.70, the biggest drag on the HSI.

Futures on the Standard & Poor's 500 Index climbed 0.4 percent Friday. In New York, the index dropped for a fourth day, falling 0.9 percent Thursday.

Service industries in the US expanded in April at the slowest pace in eight months as companies cut back in response to higher energy costs, according to the Institute for Supply Management's index of US non-manufacturing companies published on May 4.

Applications for jobless benefits unexpectedly jumped by 43,000 to 474,000 in the week ended April 30, the most since August, US Labor Department figures showed Thursday.

Also, US consumer confidence dropped last week to the lowest level in more than a month as rising fuel costs squeezed American household budgets. The Bloomberg Consumer Comfort Index decreased to minus 46.2 in the week ended May.

Commodity stocks fell after crude oil and metal prices declined on concern that economic growth will slow as central banks seek to cool inflation by raising borrowing costs.

Cnooc slid 2.3 percent to HK$17.98, while PetroChina Co dropped 0.8 percent to HK$10.48. Jiangxi Copper fell 2.2 percent to HK$24.10.

Crude oil for June delivery plunged 8.6 percent to $99.80 a barrel Thursday. The London Metal Exchange Index of six metals including copper and aluminum sank for a second day, falling 4 percent Thursday, the biggest drop since November 16.

European Central Bank President Jean-Claude Trichet signaled Thursday the bank would wait until after June to raise interest rates again, wrong-footing some investors who had expected a quicker move to fight inflation.

Hong Kong stocks last sank for eight straight days in the period ended April 1, 2003, after US forces began their attack on Iraq with cruise missiles in what commanders described as a plan to "decapitate" Saddam Hussein's leadership before an all-out assault to disarm the nation.

The region's markets also plunged in 2003 as a global outbreak of severe acute respiratory syndrome, or SARS, killed at least 774 worldwide, with China and Hong Kong accounting for more than 80 percent of deaths, according to the World Health Organization.

The Hang Seng advanced 1.1 percent this year through Thursday, as global economic data and corporate earnings eased concern that Japan's nuclear crisis and tensions in the Middle East will derail growth. Shares in the gauge traded at an average 12.3 times forecast earnings Thursday, compared with 14.4 times at the end of last year, according to data compiled by Bloomberg.

While oil companies dropped on lower crude prices, airlines advanced on speculation fuel costs will drop. Cathay Pacific Airways Ltd gained 3.2 percent to HK$19.90, the biggest increase in the HSI. China Southern Airlines Co, Asia's largest carrier by passenger numbers, surged 7.1 percent to HK$4.24, while rival China Eastern Airlines Corp, the nation's second biggest by people carried, increased 5.5 percent to HK$3.64.

Futures on the HSI dropped 0.6 percent to 22970. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, slid 1.2 percent to 17.09, indicating options traders expect a swing of 4.9 percent in the HSI in the next 30 days.

Bloomberg

(HK Edition 05/07/2011 page3)