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HONG KONG, Jan 31 AFP

January 31 2013, 8:57PM

Hong Kong shares have ended 0.39 per cent lower after hitting a 21-month high the previous day and following losses on Wall Street.

The benchmark Hang Seng Index on Thursday fell 92.53 points to 23,729.53 on turnover of HK$69.90 billion ($A8.71 billion).

Despite the loss, the index closed the month five per cent higher, while analysts expect further gains at the start of February.

"I wouldn't be surprised if the Hang Seng Index rises further to test 24,000 before Chinese New Year," which starts on February 10, Castor Pang, head of research at Core Pacific-Yamaichi, told Dow Jones Newswires.

Wall Street provided a negative lead after the US Commerce Department said the world's biggest economy shrank at an annual rate of 0.1 per cent in the October-December quarter. Forecasts had been for a 1.0 per cent rise.

Eyes will now turn to Chinese manufacturing data due out on Friday, while Washington will later in the day unveil closely watched jobs figures for new clues as to the state of the economy.

In Hong Kong, oil giant CNOOC fell 2.3 per cent to $HK16.02 after setting a conservative output target for 2013 while lifting its capital expenditure budget.

Sourcing firm Li & Fung fell 3.7 per cent to $HK10.90, extending losses of more than 20 per cent so far this year after issuing a profit warning this month.

Mobile operator China Unicom was up 1.6 per cent at $HK12.46.

Chinese shares closed up 0.12 per cent. The benchmark Shanghai Composite Index rose 2.95 points to 2,385.42 on turnover of 116.2 billion yuan ($A18.05 billion).

The market has risen 22.4 per cent since its December 4 trough and the trend will likely continue on hopes of improvement in corporate earnings and optimism over the domestic economy, analysts said.

"Investor confidence is recovering and that's spurring demand," Zheshang Securities analyst Zhang Yanbing told Dow Jones Newswires.

Higher prices sent metals stocks up, with Chihong Zinc & Germanium jumping 8.05 per cent to 15.98 yuan and Jiangxi Copper up 5.18 per cent to 26.62 yuan.

With air pollution continuing to plague large parts of China, pollution control equipment maker Fujian Longking advanced 3.32 per cent to 27.99 yuan, while face mask producer Shanghai Dragon rose 2.39 per cent to 6.00 yuan.