Hang Seng slides from record

GLOBAL MARKETS

Hong Kong's Hang Seng Index slumped from a record in the busiest trading day since 1998 on concern a seven-month rally had made stocks expensive relative to prospects for profit growth. China Mobile Ltd. led declines.

``It has been quite a challenging market for all the fund managers,'' said Liu Yang, who helps oversee more than $3 billion at Atlantis Investment Management (H.K.) Ltd. ``We are enjoying the prices going up, but we have to see whether the earnings are also catching up.''

The Hang Seng lost 387.81, or 1.9 percent, to 20,025.58 at the 4 p.m. close in Hong Kong. The 36-member index, which yesterday closed at a record 20,413.39, posted its biggest drop since Nov. 28. The Hang Seng China Enterprises Index, which tracks the so-called H shares of 37 mainland companies, declined 3.9 percent to 10,347.67.

Almost five stocks fell for each that rose on the Hang Seng today. Its January futures dropped 2.2 percent to 20,052.

Meanwhile, European stocks fell after the US Federal Reserve showed increased concern that the economy will slow and inflation will accelerate.

The Dow Jones Stoxx 600 Index lost 0.5 percent to 367.93 at 1 p.m. in London, as about four stocks declined for each one that advanced. The Stoxx 50 dropped 0.3 percent, and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, decreased 0.6 percent.

National benchmarks sank in 15 of the 18 western European markets. The U.K.'s FTSE 100 slid 0.6 percent. Germany's DAX dropped 0.5 percent and France's CAC 40 declined 0.8 percent.

In the US, stock-index futures fell before a report on the services industry that may add to evidence the world's biggest economy is slowing.

"Every single data point is being scrutinized by the market to get a handle on where the economy is going,'' said Ian Sharman, who helps oversees $1.2 billion at Royal London Asset Management in London. ``It's all about data and where the Federal Reserve is going to go from here.''

Wal-Mart Stores Inc., the world's largest retailer, and General Electric Co., the second-biggest company by market value, retreated.

Standard & Poor's 500 Index futures expiring in March lost 2.1 to 1422.7 as of 8:17 a.m. in New York. Dow Jones Industrial Average futures dropped 24 to 12,506. Nasdaq-100 Index futures declined 3.5 to 1775.50.

US stocks yesterday erased an initial rally after minutes from the Federal Reserve's December 12 meeting highlighted concern about slowing economic growth and accelerating inflation.

A report today on US service industries, which make up almost 90 per cent of the US economy, is due at 10 am New York time.

Growth in service industries probably slowed in December, reflecting the slump in housing, according to a survey of economists. The Institute for Supply Management's index of non- manufacturing businesses is forecast to fall to 57 from 58.9.

Shares of Wal-Mart, which today said January sales at stores open at least a year will rise between 1 and 2 percent, slipped 30 cents to $47.25 in Germany. GE declined 7 cents to $37.90.