The consumer goods exporter sealed a deal with Wal-Mart Stores to supply the US retailer with goods valued at $2 billion in the first year. The benchmark Hang Seng Index ended down 1.15 percent or 234.38 points at 20,121.99, its lowest in nearly five months. Turnover rose to HK$69.5 ($8.9 billion), up from Thursday's HK$65.98 billion.
"Chinese government policy actions are hurting the market, especially the banks," said Daniel Chan, senior investment strategist with DBS Bank. "Banks will continue to be under pressure, especially if the government takes more steps to control lending such as higher reserve requirement. The last resort is to raise interest rates."
The HSI is trading slightly above its 200-day moving average, often used by investors as an indicator of longer-term trend changes. The last time the Hang Seng index closed below its 200-day moving average was on April 30, 2009. The China Enterprises Index of top locally listed mainland Chinese stocks was down 1.18 percent at 11,498.20.
Debutant SouthGobi Energy Resources was down 11.1 percent on its trading debut. Chinese banks fell, with China Construction Bank down 2.29 percent and Industrial Commercial Bank of China 2.06 percent lower. HSBC fell 1.70 percent. China Life was up 1.46 percent, after China's biggest insurer said it expected its profit for 2009 to rise more than 50 percent.
Foxconn International Holdings, which makes iPhone handsets for Apple, added 1.85 percent. Foxconn is expected to be a potential supplier for Apple's new iPad tablet computer. China's key stock index slipped 0.16 percent on Friday and posted only its second monthly fall in more than a year, with financial and property shares soft as heavy new share supplies and liquidity tightening steps weighed.
The Shanghai Composite Index ended at 2,989.292 points, closing below the psychologically important 3,000 point mark for a third session. The index marked an 8.8 percent monthly loss, breaking a four-month rising streak under the pressure of heavy new share supplies and government liquidity tightening steps, including moves to clamp down on bank credit and a surprising rise in banks' reserve requirement ratio by half a percentage point in mid-January.
Gaining Shanghai A shares outnumbered losers by 503 to 360, while turnover remained sluggish at 95 billion yuan ($13.92 billion), although it was up from Thursday's four-month low of 85 billion yuan. China XD Electric edged 0.39 percent higher to 7.82 yuan after a weak market debut on Thursday - the first on the mainland to end below its IPO price in 5-1/2 years.
"After XD fell below its IPO price on its debut, investors are expecting the pace of IPOs may slow down in February," said Cao Xuefeng, senior analyst at Western Securities in Chengdu. "The index may stage a mild rebound in February after falling so sharply in January." The country's top lender ICBC, was down 0.21 percent at 4.85 yuan, while the Shanghai property sub-index eased 0.46 percent to 4,063.243 points.