HONG KONG (Dow Jones)--Hong Kong shares ended lower Thursday, with the decline led by trading firm Li & Fung, as investors treaded cautiously ahead of today's European Central Bank and European Union meetings. The blue-chip Hang Seng Index fell 132.77 points, or 0.7%, to 19,107.81 after trading between 18,956.41 and 19,137.56 during the session. Market volume totaled HK$48.83 billion, down from HK$51.66 billion Wednesday. Analysts expect the benchmark index to trade in a 18,700-19,500 range over the next two weeks, with gains likely to be limited by lingering doubts over the ability of euro-zone leaders to resolve their debt problems. "All eyes will be on the French and the German leaders at the European Union summit. Investors are hoping the leaders could come up with a concrete solution to shore up the euro zone," said Alvin Cheung, associate director of Prudential Brokerage. Bank of America-Merrill Lynch said it expects the European Central Bank to cut rates by 25 basis points following Thursday's meeting and simultaneously announce a battery of liquidity-enhancing measures to stimulate bank lending. Analysts said investors would also be closely watching China's key economic data due Friday--including November inflation and industrial production figures--for clues to Beijing's policy direction. Li & Fung was the worst performing blue chip, down 5.0% at HK$16.14, after Singapore state investment firm Temasek Holdings said Thursday it planned to raise up to S$600 million from the sale of zero coupon bonds exchangeable into shares in the Hong Kong-listed trading group. Hong Kong developers were also down, amid general expectations of a significant correction in the city's property market next year. Henderson Land dropped 1.2% to HK$37.85, Cheung Kong fell 1.1% to HK$90.60, and Wharf Holdings was down 1.1% at HK$37.55. Credit Suisse said in a note Thursday that Hong Kong property prices are likely to fall, but may not collapse. "The very loose monetary stance in the U.S. anchors Hong Kong's mortgage rate at a low level, while the job market remains resilient," the research house said. Fashion chain Esprit--which derives the bulk of its revenue from Europe and which has recently embarked on a strategic overhaul--bucked the trend due to a technical rebound. The company rose 1.5% to HK$10.94 after tumbling more than 10% over the past two days following unexpected news Monday that its chief financial officer will resign effective June 1. -By Polly Hui, Dow Jones Newswires; 852-2802-7002; polly.hui@dowjones.com

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