Hong Kong stocks declined 2.9 percent in a broad sell-off on Friday, as worries mounted about credit conditions following fresh signs that turmoil in the US subprime mortgage market was spreading world-wide. Trade terminated at 0645 GMT, more than an hour earlier than the normal close following a cyclone warning.
Among the day's rare bright spots, China Shipping Container Lines Co Ltd (CSCL) hit a lifetime high in resumed trade after reporting a 14-fold rise in its first-half earnings.
Its shares were also supported by the company's plans to issue yuan-denominated A shares to fund an expansion. Volatility will be the order of the day in the days ahead, brokers said. "We haven't hit bottom," said Ernie Hon, strategist at ICEA Securities.
"There may be more downside. We'll be focused on the US market. The first pullback target is 21,500; worst case, 21,000." At that level, Hong Kong will have retreated more than 10 percent from its peak, a magnitude that qualifies as a correction by some investors' definitions.
The benchmark Hang Seng Index closed down 646.65 points at 21,792.71, or 7.5 percent off its peak in late July. The index ended the week down 3.3 percent, its worst weekly loss since early March when global equities were battered by the unwinding of carry trades.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, fell 3.2 percent to 12,276.06, after slipping to levels not seen since June 29.
H shares, now about 10 percent off their late-July peak, posted a weekly loss of 3.9 percent, also their worst weekly performance in five months. Main board turnover was a low HK$65.5 billion (US $8.4 billion) due to the early market closure.
The day's top traded stock was global bank HSBC Holdings Plc, which dropped 1.7 percent to HK$142.10. China Life slid 4.2 percent to HK$30. China Merchants Bank was off 1.7 percent at HK$28.55, despite posting a 120 percent rise in first-half earnings on Friday.
China Mobile fell 3.8 percent to HK$84.65. Oil stocks underperformed, as crude prices fell amid a drop in gold prices and a strengthening in the dollar, while worries about the health of the US economy weighed.
PetroChina Co Ltd tumbled 3.3 percent to HK$10.52 and CNOOC Ltd slid 5.8 percent to HK$8.60. Hong Kong Exchanges and Clearing Ltd, a barometer of market sentiment, fell 3.1 percent to HK$122.50. CSCL shares were heavily traded, ending the day up 3.6 percent at HK$7.24.
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