HK stocks plunge 3.97% on Wall Street fall

Hong Kong stocks plunged 759.35points, or 3.87 percent, to close at 18,872.85 on Tuesday, on overnight slump in the Wall Street and a weak mainland market.

Turnover fell to 64.37 billion HK dollars from Monday's 91.63 billion HK dollars .

Analysts said trading activity dived as many investors chose to stay on the sidelines to reduce their exposure to the volatile market. Many said they expect the weak U.S. and Chinese equities markets to weigh on Hong Kong's blue-chip index in the near term.

The Dow Jones Industrial Average fell 372.75 points, or 3.27 percent, to 11,015.69 Monday, wiping out its Friday gains, as investors worried that a 700 billion U.S. dollars bailout for the financial sector may not resuscitate a slumping economy.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 34.90 points at 2,201.51. The key index surged 18.0 percent in the previous two sessions after the Chinese government released a package of measures to bolster the market.

Hong Kong property companies led Tuesday's decline on profit-taking after the Hang Seng property sub-index advanced 8 percent in the previous two trading sessions. The sub-index ended down 5.8 percent at 21,286.42. Li Ka-shing's property flagship, Cheung Kong, ended down 5.7 percent and Sun Hung Kai Properties slid 5.9 percent.

Heavyweight HSBC Holdings was down 2.06 percent and China Mobile down 4.17 per cent.

China Mengniu Dairy plunged 60 percent to 7.95 HK dollars after resuming trade Tuesday, after having been suspended for nearly a week amid the Chinese government's investigation into melamine-tainted milk products.

The three mainland insurers moved lower across the board as mainland stock markets weakened. China Life was down 5.13 percent, Ping An down 5.99 percent and PICC P&C down 6.7 percent.

The mainland banks declined comprehensively. CCB, ICBC and Bank of China slid 3.66 percent, 3.92 percent and 4.51 percent respectively.

Share prices of local banks also dived. Hang Seng Bank was down2.05 percent, Bank of East Asia down 4.09 percent, BOC HK down 5.4percent and StanChart down 4.46 per cent.

Despite the rise of oil prices, CNOOC, the largest offshore oil producer in the mainland, was down 2.62 percent, while PetroChina,the largest oil firm in the mainland, was down 3.69 percent. Sinopec Corp, the largest oil refiner in the mainland was down 5.54 percent.

Source:Xinhua