Hong Kong stocks fell off 15,000 point level quickly after it opened slightly above the support line on Monday, on concerns that heavyweight HSBC will have to raise capital during the financial crisis as well as a grim outlook for Chinese financial companies.
The blue-chip Hang Seng Index fell 505.12 points, or 3.34 percent, to 14,622.39 after fluctuating between 14,622.39 and 15, 227.43 during the session. Turnover totaled 36.49 billion HK dollars (4.72 billion U.S. dollars), down from Friday's 57.38 billion HK dollars (7.4 billion U.S. dollars).
Analysts said the chances are still there for the Hang Seng Index to test its key 16,000 point level in the near term, but warned any rebound will be short-lived.
Three of the four major sub-indices lost ground. The properties sub-index fell most at 4.46 percent, followed by the commerce and industry at 3.63 percent and the finance at 3.36 percent. The utilities sub-index rose 1.11 percent.
The heavyweight HSBC fell for the third straight session, dropping by 3.27 percent to 74.05 HK dollars, as it continues to be battered by expectations it will have to cut dividends and raise between 15 and 25 billion U.S. dollars because of the global crisis, analysts said.
The banking giant, with a 16.3 percent weighting, contributed 64 points of the index's 505-point decline.
China Mobile was down 5.52 percent to 77 HK dollars. China Unicom was up 0.19 percent at 10.40 HK dollars despite faster loss in fixed-line users.
HKEX was down 3.68 percent at 75.90 HK dollars.
The three insurers and six banks moved lower across the board on a grim outlook, especially in the near term, as the global crisis has tightened liquidity and driven up the cost of lending.
Bank of China dropped 2.16 percent to 2.27 HK dollars. Bank of Communications was 3.39 percent lower at 5.70 HK dollars and ICBC fell 1.83 percent to 4.30 HK dollars.
China Life was down 4.08 percent, Ping An down 3.96 percent, PICC P&C down 6.96 percent.
Bucking the trend, magnesium producer CVM Minerals rose as much as 25 percent on its debut. It closed 20 percent higher at 1.26 HK dollars from an offer price of 1.05 HK dollars.
Source: Xinhua
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