HONG KONG—Hong Kong stocks dropped Monday as profit-taking offset gains by property developers.
The blue chip Hang Seng index fell 57.07 points, or 0.2 percent, to 26,183.95, after gaining 24 percent over the past seven weeks.
Analysts said despite the consolidation Monday, the local market's upward trend remains strong.
Property companies rose, still benefiting from the low interest rate environment, traders said.
Local developer Sun Hung Kai Properties gained 1.3 percent to HK$142.30, New World Development rose 1.2 percent to HK$21.65, and Cheung Kong advanced 1.7 percent to HK$126.70.
But Peter Lai, a sales director at DBS Vickers Securities Ltd., said gains by local developers may not be sustainable.
Interest rates "may turn upward if upcoming U.S. economic data prove to be benign," he said. U.S. interest rates may rise as early as the third quarter this year, he said.
Investors may also want to turn their attention to Chinese developers, said Steven Leung, UOB KayHian Ltd.'s institutional sales director.
"The market is expecting no more rate hikes or an increase in the reserve requirement ratio in May," he said. "Such sentiment may spur China property stocks to rally again."
China Overseas Land rose 0.5 percent to HK$16.90. Guangzhou R&F continued to lag, dropping 1.1 percent to HK$22.60.
Expectations of a pause in China's reserve ratio hikes, together with a buoyant equities market there also pushed up Chinese financial firms on the local market.
Bank of Communications rose 0.4 percent to HK$11.50, while China Life, the nation's largest life insurer by assets, gained 0.6 percent to HK$35.35.
Chinese department store operator Maoye made a lackluster trading debut on continued poor reception toward new listings. It fell 2 percent below its initial offering price of HK$3.10 to end at HK$3.04.
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