Hong Kong stocks close down 5.2 per cent

HONG KONG: Hong Kong share prices closed down 5.2 per cent on Monday, pushed down by troubles on the US markets, the slide of the dollar and record high oil prices, dealers said.

The benchmark Hang Seng index closed down 1,152.5 points or 5.18 per cent at 21,084.61.

Sharp falls on the mainland Chinese market in Shanghai also helped drive shares down, dealers said.

A move by the US Federal Reserve to cut the interest rate charged on its direct loans to banks on Sunday failed to calm investor jitters, as it only underscored the crisis enveloping the financial sector, they said.

"The market's obsession with a few weak financial institutions like Bear Stearns outweighs many factors in the US economy which remain intrinsically sound," said Howard Gorges, vice chairman at South China Securities.

"There is a lot of negativity out there and we are in a situation in which a spate of bad news has rattled markets all around the world," he said.

"Many investors have taken two main lines of defense -- sell down stocks or stay on the sidelines."

Among large caps, HSBC bank was down 4.80 Hong Kong dollars or 3.9 per cent at 118.10 and the Hong Kong stock exchange, HKEx, was off $7.90 or 5.9 per cent at 125.60.

China financials were also sharply lower on worries of new credit-tightening measures in China.

Source : TET