Financial markets across Asia continued to tumble yesterday as worries over a global credit crisis deepened, sparking a broad sell-off of shares.
Analysts said a confidence crisis has been looming and market woes are likely to continue in the coming months.
Hong Kong's benchmark Hang Seng Index slumped over 703 points to 20,672, or 3.29 percent - the lowest since early this year - as nearly all its blue chips fell, despite recent strong performances and interim results.
Other Asian stock markets also saw investors hastily offloading holdings, including those in industry majors.
"Investors are becoming increasingly panicked after selling off their cheap shares. Now they're starting to sell their holdings in the heavyweights - despite strong performances and good interim results," said Louise Wong, director of Phillip Asset Management, a securities consulting firm in Hong Kong.
"As for Hong Kong investors, confidence is being shaken by the global market atmosphere. And worse still, anticipation the mainland will encourage promising firms to list on the A-share market is also weakening investor confidence," Wong said.
She predicted the downturn is set to continue until October at least.
The Korea Composite Stock Price Index, or KOSPI, fell over 7 percent as the market caught up with the rest of Asia after being suspended for a public holiday.
Daewoo Shipbuilding was one of the hardest hit. Its shares fell over 13 percent, followed by Hyundai Heavy Industries, which lost about 9 percent. The secondary board of the Korea Exchange automatically suspended trading for 20 minutes.
Stocks in Japan's top three carmakers, Honda, Nissan and Toyota, fell about 3 percent on average, as the country's economic index, the Nikkei 225, shed over 3 percent.
Mitsubishi UFJ Financial, Japan's largest bank, had lost 3.7 percent by the end of the morning session.
A stronger yen has prompted investors to sell shares in exporters because Japanese products are now more expensive and less competitive overseas.
Other benchmark indices in the region, including those of the Philippines and Indonesia, were also down more than 2 percent.
The Hang Seng China Enterprises Index, made up of the top H shares or stocks of mainland-incorporated companies listed in Hong Kong, was also hit yesterday. Heavyweight players like China Shipping Development, China COSCO and China Shenhua were the big losers of the day.
Source: China Daily
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