Hong Kong shares sank below 15,000 points for the first time in nearly three years on Friday, following overwhelming sell-offs in global markets as investors fear the ongoing financial crisis may lead to a global recession.
The benchmark Hang Seng Index (HSI) tumbled 7.19 percent, or 1,146.37 points, to ease at 14,796.87, its lowest closing level since November 2005.
The HSI tumbles 7.2 percent Friday as worried investors give up holdings after steep losses on Wall Street and in regional bourses. The blue chip index closed down 1,146.37 points, or 7.2 percent, to 14,796.87, on Friday. It was down 9.5 percent at one point in the day. AP
The mainboard turnover hit HK$69.4 billion, slightly higher than Thursday's HK$60.9 billion.
Patrick Shum, chief portfolio strategist at Karl Thomson Securities, said the market is lacking confidence as the credit crisis spreads globally.
"Rate cuts by central banks can hardly build up the market confidence," Shum added.
"The HSI drop may narrow next week; it may also show a rebound of 1,000 points," he said, noting that the key is to see whether any new measures will be announced this weekend.
The benchmark index dropped more than 17 percent, or 3,000 points, in the past week - its steepest weekly percentage drop since the market meltdown of 1997. The index has been cut by more than half from its peak level of 31,958.41 achieved one year ago.
Tung Tai Securities Associate Director Kenny Tang said the market still remains quite volatile at the moment.
"The HSI may test the level of 15,500 next week, while 14,000 will be a support level for the index," Tang said, hoping that the central government will implement new financial measures to support the Hong Kong stock market.
Financial stocks ran with the poorest results in Friday trading. Index heavyweight HSBC holdings slid 6.95 percent, or HK$8.20, to end at HK$109.80. ICBC, the biggest lender in China, declined 7.41 percent, or HK$0.30, to HK$3.75. And its lesser rival, China Construction Bank, dropped 7.64 percent, or HK$0.31, to also end at HK$3.75.
Bourse operator Hong Kong Exchanges and Clearing fell 5.17 percent, or HK$4.55, to end at HK$83.45, while the world's largest wireless carrier, China Mobile, shed 4.32 percent, or HK$3, to close at HK$66.40.
Regarding the future of the HSI, Shum thought the index could sink below 12,000 points by the end of this year, and he said the current bearish market is much deeper than many people expected.
"The financial situation has not yet reached its worst, and it is just the beginning," Shum said.
The market is merely hit by credit crisis at the moment, while the global economic recession has not even started, Shum added.
By Joey Kwok
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