Hong Kong stocks fell, dragging the benchmark index to its lowest close in two weeks, as banks and property developers declined after a report said the mainland's biggest lenders have stopped new loans to real-estate companies.

The Hang Seng Index (HSI) slipped 0.8 percent to 24,027.18. Declines were limited as JPMorgan raised its recommendation on the MSCI Hong Kong Index to "overweight" from "underweight."

The Hang Seng China Enterprises Index fell 1.8 percent to 13,416.25.

ICBC fell 1.8 percent to HK$6.49. China Construction Bank Corp dropped 1.2 percent to HK$7.34. Bank of China Ltd slid 1.5 percent to HK$4.49.

The mainland's four biggest banks will not issue any new loans to property developers for the remainder of the year, the state-run China Real Estate Business reported, citing unidentified executives at the banks. ICBC, Construction Bank, Bank of China and Agricultural Bank of China Ltd had met their allotted loan targets for the year, according to the report.

Agricultural Bank and Construction Bank denied the report that loans to property developers have been halted, Caixin Online said, citing unidentified people at the banks. ICBC also denied it had stopped extending loans to property developers for the remainder of this year.

China Overseas declined 2.9 percent to HK$15.98. China Resources Land Ltd lost 2.1 percent to HK$15.06.

China Coal slid 4.1 percent to HK$13.18, the sharpest drop on the HSI, after saying sales dropped 0.9 percent to 9.32 million tons, while coal production rose 23 percent from a year earlier.

Aluminum Corp of China Ltd dropped 2.6 percent to HK$7.27.

The mainland's metals producers may extend declines in the "near term" on speculation the country will further tighten monetary policy, according to China International Capital Corp.

Futures on the HSI slid 1 percent to 23,955.

Bloomberg

(HK Edition 11/16/2010 page3)