Hong Kong share prices stocks closed sharply lower on Wednesday in volatile trade following a stamp duty hike in the Chinese mainland aiming at curb speculation in the red-hot market.

Hang Seng index plunged 175.83 points, or 0.86 percent, to close at 20,293.76 off a low of 20,184. Turnover surged to 75.6 billion HK dollars (9.7 billion U.S. dollars) from 54 billion HK dollars on Tuesday.

China's State Council, or cabinet, approved an increase in the stamp duty tax to 0.3 percent from 0.1 percent, effective Wednesday, in its latest bid to cool the markets. The move led to a 6.5-percent drop of the Shanghai bourse's benchmark index Wednesday and also affected mainland firms listed in Hong Kong.

Financial shares such as China Life, Ping An and PICC PC dived 2.71 percent to 3.27 percent. ICBC, CCB, Bank of China,CM Bank and Bankcomm slid 0.25 percent to 2.14 percent. CITIC Bank once fell below the offer price of 5.86 HK dollars and shed 1.34 percent to 5.88 HK dollars.

On mainland telecom stocks side, China Mobile was down 0.63 percent, China Telecom down 3.82 percent, Netcom down 1.29 percent, and China Unicom down 3.08 percent.

Mainland property stocks moved lower widely. R & F Properties, Agile Property, China Overseas, China Res Land and Country Garden trimmed 0.59 percent to 4.77 percent. Hong Long Hldgs and Guangzhou Inv sagged 2.87 percent to 5.36 percent. Beijing N Star added 1.74 percent following losses. The property agent Hopefluent bucked up 2.55 percent against the downtrend.

On resource stocks side, PetroChina skidded 2.08 percent; Sinopec Corp dropped 1.61 percent; coal stocks that received upbeat comment by Goldman Sachs Tuesday were in mixed shows, China Shenhua was down 1.25 percent, China Coal with capital injection concept up 1.06 percent, and Yanzhou Coal unchanged.

Domestic demand stocks declined. Mengniu Dairy was down 1.54 percent, Li Ning down 1.19 percent, China Agri down 0.65 percent, Belle Int'l down 3.69 percent, Jiahua Stores H that had been speculated up at listing continuously down 1.55 percent, and Yurun Food that had been robust recently also down 3.75 percent.

Property stocks slipped as local offered rates mounted. Cheung Kong, Henderson Land, SHK PPT, New World and Sino Land shed 0.94 percent to 1.82 percent. Hang Lung PPT bucked up 1.9 percent against the downtrend. Lease stock Wharf Holdings was down 1.73 percent, and Swire Pacific 'A' down 0.79 percent.

On bank stocks side, HSBC was flat, Hang Seng Bank up 0.19 percent, Bank of East Asia down 2.25 percent, and BOC HK down 0.11 percent.

Securities firm stocks that had been in hot speculation also shrank after the mainland raised shares stamp duty. First Shanghai and Shenyin Wanguo plunged 13.41 and 8.23 percent, while Emperor Capital trimmed 4.63 percent following gains, and peer Emperor IHL further advanced 10.58 percent.

Despite a general fall, some penny stocks still mounted. Phoenix TV was up 9.09 percent, resetting a new high, China Sci-tech that was in preliminary negotiations over indirect interests in a metal mine in China up 12.68 percent, Chia Tai Ent that had unveiled restructuring of mainland supermarket business up 23.68 percent, and Leroi Holdings sharply up 45.35 percent before trading suspension. (One U.S. dollar equals 7.79 HK dollars)

Source: Xinhua