"I think they blame the nonresident buyers, mainly from China's mainland, for driving up the prices of residential properties in Hong Kong," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "But any kind of control is not good. You will distort the market. The key is to increase the supply."

The tax will also apply to companies to close a loophole that has seen companies buying up residences and then transferring them to nonresidents.

Hong Kong-listed Henderson Land Development Co. and Sino Land Co. both plummeted 6.4 percent.

Japanese car maker Honda Motor Corp. fell 4.7 percent after lowering its forecasts for fiscal year 2013 due to a recent sales drop in China sparked by a territorial dispute.

On Wall Street on Friday, stocks finished mixed after investors found little to like in weak corporate earnings reports and news of only tepid growth in the U.S. economy in the third quarter.

The government estimated that the U.S. economy expanded at a 2 percent annual rate from July through September. That was better than the previous quarter but not strong enough to bring down the unemployment rate.

Benchmark oil for December delivery was down 68 cents to $85.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 23 cents to finish at $86.28 in New York on Friday.

In currencies, the dollar fell to 79.58 yen from 79.66 yen late Friday in New York. The euro fell to $1.2894 from $1.2932.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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