Hong Kong stocks closed sharply lower on Monday with the key Hang Seng index posting its biggest one-day drop ever.

The benchmark Hang Seng Index slid 1,526.02 points, or 5.01 percent, to 28,942.32 after trading between 30,356.79 and 28,920.30 during the session.

H-share index, which reflected the performance of state-owned companies registered in the Chinese mainland, plummeted 1,395.58 points, or 6.16 percent, to 21,244.29.

Turnover rose to 158.76 billion HK dollars (US$20.46 billion) from last Friday's 152.35 billion HK dollars (US$19.68 billion).

Analysts considered Monday's slid for several reasons, among which Chinese Premier Wen Jiabao's words over the weekend is the biggest one. Wen said on Saturday during his visit to Uzbekistan that the individual investor scheme, dubbed the "through train" to Hong Kong, should be implemented only after ensuring that conditions are in place to minimize its impact on China's domestic bourses and fund flows. He also said that investors' risk awareness must be improved before they are allowed to buy overseas stocks.

The Hang Seng Index went from 20,300 in mid-August to almost 32, 000 last week after Beijing said it would allow individuals there to invest in Hong Kong directly, on hopes of greater capital inflows from the Chinese mainland.

Experts also thought the shares fell on fresh worries about the US supreme mortgage problem. The world famous bank, Citigroup Inc., said it will make further write-downs to reflect the declining value of its US supreme-related securities.

China Mobile, the biggest constituent of the benchmark index by market capitalization, fell 7 percent to 141.60 Hong Kong dollars and accounted for 527 of the Hang Seng Index's points drop.

China Life Insurance dropped 4.8 percent to 47.80 Hong Kong dollars and Ping An Insurance slipped 4.4 percent to 100.30 Hong Kong dollars.

Oil refiner Sinopec dropped 10 percent to 11.04 Hong Kong dollars on profit-taking after its recent rally on strong oil prices.

Chinese oil and gas producer PetroChina followed the broad market decline. It slumped 8.2 percent to 18.00 Hong Kong dollars. That was in contrast to its A shares, which more than doubled on Shanghai debut Monday, closing at 43.96 yuan, compared with their initial public offering price of 16.70 yuan. The huge gains secured PetroChina's position as the world's biggest company by market capitalization.

(Xinhua News Agency November 6, 2007)