Hong Kong stocks ended sharply lower Monday amid concerns that
the U.S. could fall into recession and sharp falls on the Shanghai
market.
The blue-chip Hang Seng Index fell 4.25 percent, or 1,068.76
points, to 24,053.61, after the index traded between 23,586.52 and
24,384.27 during the session.
Turnover totaled 107.79 billion Hong Kong dollars (13.82 billion
U.S. dollars), down from 126.66 billion Hong Kong dollars (16.24
billion U.S. dollars) Friday.
Traders said they expect volatility in Hong Kong to continue in
the near term. They said investors are now waiting for the outcome
of the U.S. Federal Reserve's meeting on interest rates late
Tuesday.
In the Chinese mainland, the benchmark Shanghai Composite Index,
which tracks both A and B shares, fell 7.2 percent to 4,419.29
Monday as severe weather across much of the country has disrupted
transport services, caused energy shortages and destroyed
crops.
Analysts widely expect the U.S. Federal Open Markets Committee
to cut the key federal funds rate half a percentage point to 3
percent, following the recent 75-basis point cut. They also said
U.S. President George W. Bush may expand on the planned fiscal
stimulus package for the U.S. economy when he delivers his State of
the Union speech late Monday, which could help fuel a rebound in
Hong Kong shares.
China Mobile, Hong Kong's biggest blue chip by capitalization,
fell 4.8 percent to 117.10 Hong Kong dollars after ABN Amro, one of
the largest banks in Europe, cut its price target to 180.00 Hong
Kong dollars from 200.00 Hong Kong dollars on rising inflation and
the likelihood of further interest rate hikes in China. The
brokerage maintained its buy rating. It said it expects China
Mobile to bottom out when an expected restructuring in China's
telecommunications sector occurs. The company will resume its rise
when the market refocuses on business fundamentals, ABN said.
Banking giant HSBC dropped 3.3 percent to 116.50 Hong Kong
dollars on lingering subprime concerns and its exposure to the U.S.
economy.
Chinese coal producer Shenhua Energy bucked downtrend by edging
0.1 percent higher to 41.85 Hong Kong dollars on rising coal
prices.
(Xinhua News Agency January 29, 2008)
