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HK stocks close down more four pct, but off lows

HONG KONG: Hong Kong stocks closed down more than four percent on Thursday, but off their lows, with selected blue chips and technology stocks being dumped.

The blue chip Hang Seng Index ended down 693.49 points or 4.38 percent at 15,153.23. Turnover was HK$23.11 billion, compared with HK$24.75 billion on Wednesday. Thursday's fall brought the Hang Seng's cumulative losses since closing at a record 17,369.63 on Monday to 2,216.40 points or 12.76 percent.

About 30 minutes before the close the index looked set to post one of its biggest point losses, when it was down 1,082.75 points or almost seven percent, before staging a partial recovery.

Traders and analysts said they thought the selling was overdone, with much of the latest wave of selling believed to be retail-led, with some investors hit by margin calls.

"Selling pressure is heavy and the turnover is high. People have turned extremely cautious and few dare to buy," said Marco Mak, research director at Tai Fook Securities Co Ltd.

Traders and analysts said the selling followed excessive gains in the last quarter of 1999, when the benchmark index gained 33.21 percent or 4,228.86 points.

"Now the losses are looking overdone," said South China Securities director Howard Gorges. Declines outpaced advances by 525 to 139, with 248 issues unchanged.

Funds fleeing the Hong Kong market helped neighbouring Shenzhen's hard currency B shares close sharply higher, Shenzhen brokers said.

While 30 out of the 33 Hang Seng Index stocks fell, Gorges said a handful of stocks led by China Telecom (Hong Kong) Ltd and HSBC accounted for the bulk of the losses.

China Telecom (Hong Kong) fell HK$3.20 or 7.1 percent to end at HK$41.90 on turnover of HK$1.5 billion, accounting for 198.69 points of the index losses, according to Reuters 3000.

It was 23 percent below its high of HK$54.50 set on Monday but about 41 percent above its November 5 close of HK$29.80.

HSBC ended down HK$3.00 or 2.96 percent at HK$97.50, accounting for about 114.79 points of the losses.

Hutchison Whampoa Ltd lost HK$5.50 or 5.14 percent to HK$101.50, contributing 96.58 points to the index fall.

Cable & Wireless HKT lost HK$1.10 or 5.51 percent to HK$18.85, weighing in with 60.40 index points. Technology stocks suffered after the tech-heavy Nasdaq index lost 24.15 points or 0.62 percent to close at 3,877.54 overnight in the US

Internet play Pacific Century CyberWorks slid HK$2.15 or 13.4 percent to HK$13.90, down about 32 percent from its December 29 high of HK$20.40.

Analysts said they believed investors were overestimating the impact of expected US rate rises on local stocks, particularly now that the interest rate-sensitive property sector no longer was such a major driver of the Hong Kong economy.

"Property is becoming increasingly less important... therefore the interest rate sensitivity of Hong Kong has actually been diminishing," said Nomura International research head Mark Simpson.-Reuters