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)
