Hong Kong stocks plunged 398.88 points, or 1.5 percent, to close at 26,468.13 on Monday on concerns over a weakening U.S. economy.

 

Hang Seng index opened up 152 points, but the upward trend reversed in the morning session. The blue-chip Hang Seng Index fell 398.88 points to 26,468.13 after trading between 26,464.64 and 27,142.88 during the session.

 

Turnover totaled 109.67 billion Hong Kong dollars (14.07 billion U.S. dollars), down from 128.74 billion (16.51 billion U.S. dollars) Friday.

 

Analysts said the city's benchmark index will likely remain under pressure in the short term, with the concerns over the U.S. economy to offset bargain hunting.

 

The U.S.' top investment banks such as Citigroup, JPMorgan Chase and Merrill Lynch will disclose their fourth-quarter results this week and investors are concerned they will report sizable bad- loan writeoffs.

 

HSBC, which has the biggest weighting at 15 percent in the Hang Seng Index, was down 0.2 percent at 123.40 Hong Kong dollars because of concerns over the impact of the subprime mortgage problem in the U.S.

 

China Mobile, the blue chip with the largest capitalization on the local market, fell 2.8 percent to 130.20 Hong Kong dollars after Citigroup lowered its target price to 160 Hong Kong dollars from 196 Hong Kong dollars to reflect the benchmark index's nearly 5 percent fall this year.

 

Rival China Unicom ended down 3.4 percent at 18.04 Hong Kong dollars on profit-taking after rising more than 17 percent in the past three sessions on media reports of a restructuring in China's telecommunications sector involving large mergers.

 

Hong Kong-based property companies bucked the trend on expectations of a strong year for the city's real-estate market. UBS expects the city's residential prices to increase by 50 percent and office prices to go up by 30 percent by the end of 2009 because of interest rate cuts.

 

The U.S. Federal Open Market Committee is scheduled to meet Jan. 30 and economists widely expect it to cut the federal funds rate, now 4.25 percent, by at least another quarter percentage point.

 

Hong Kong typically follows interest rate adjustments in the U. S. because of the city's currency peg to the U.S. dollar. Yue Yuen Industrial rose 2.5 percent to 26.20 Hong Kong dollars ahead of its results due out Thursday on expectations it will post strong 2007 earnings.

 

(Xinhua News Agency January 15, 2008)