Hong Kong stocks dived 571.55 points, or 3.81 percent, to close at 14,415.91 on Thursday amid a new wave of selling of blue-chip companies triggered by institutional investors' reduction of their holdings in Chinese banks.

The benchmark Hang Seng Index fell 231.65 points, or 1.55 percent, to open at the day's highest 14,755.81 and widened its losses afterwards.

Market sentiment worsened amid reports that Bank of America has cut 5.6 billion shares of its holdings in China Construction Bank to 16.6 percent from 19.1 percent in a placement worth US$2.8 billion on Wednesday.

Hong Kong' wealthiest tycoon Li Ka-shing has also sold on Wednesday 2 billion shares of Bank of China, the country's second largest lender, to raise 524 million U.S. dollars through his private foundation.

Turnover weakened to 55.52 billion HK dollars (US$7.17 billion) from Wednesday's 90.02 billion HK dollars (US$11.62 billion) due to the massive placement in Chinese banks.

(Xinhua News Agency January 8, 2009)