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HK stocks post biggest drop in 9 months

(Shanghai Daily)
Updated: 2007-03-05 15:07

A man talks on his mobile phone, in front of a panel displaying the afternoon trading Hang Seng Index in Hong Kong March 5, 2007.  [Reuters]

Hong Kong's Hang Seng Index was set for its biggest decline in more than nine months, extending last week's selloff, which wiped more than US$145 billion from the benchmark.

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The Hang Seng Index dropped 581.65, or 3 percent, to 18,860.36 at the 12:30pm break in Hong Kong, the biggest decline since May 22, 2006. None of the measure's 36 members rose. March futures lost 3.2 percent to 18,807.

HSBC Holdings Plc led the decline on concern it will report lower profit today because of defaults on high-risk mortgages in the United States. Sunday Times report said the company will write off US$11 billion to cover US losses, Bloomberg reported.

"There are concerns over how bad the subprime market in the United States is," Tathagata Guha Roy, who helps manage US$1 billion for Alliance Trust Plc, said by phone today from Hong Kong. "We haven't yet seen any sign of a turnaround."

Companies with US businesses, such as HSBC and Li & Fung Ltd., also fell as a drop in consumer confidence added to concern the world's largest economy is slowing more than investors had anticipated.

The Hang Seng China Enterprises Index, which tracks the so-calledH sharesof 37 mainland companies, slid 5.3 percent to 8,507.63. China will take more steps to curb investment and lending to stop the world's fastest-growing major economy from overheating, Premier Wen Jiabao said today.