Hong Kong's benchmark index slid 2.6 percent on Wednesday in a session of whiplash trading and unprecedented turnover as investors cashed in after the market had racked up nine consecutive records highs.
Property shares bore the brunt of the profit-taking while China plays skidded 3.7 percent. HSBC Holdings plc outperformed sharply, tracking global peers higher amid hopes that credit crunch problems have bottomed.
Hong Kong's total turnover of US $27 billion was the largest ever, eclipsing Tuesday's record and on a par with Wednesday's turnover on the larger Tokyo Stock Exchange. The Hang Seng Index swung between a 2.4 percent gain and 3.4 percent loss before closing down 719.81 points at 27,479.94 points, having hit its ninth straight record at 28,871.04 during the day.
"It's been up and it's been down. I've lost count," said Antony Mak, sales director at DBS Vickers. Analysts had predicted that October, a historically volatile month, could usher in a corrective period. "Extreme volatility with high turnover: usually this indicates we're at a short-term peak and the market is due for a more significant correction," said Andy Lam, strategist at Harris Fraser.
"I want to emphasise that it's a correction, the market is still bullish." The China Enterprises index of Hong Kong-listed shares in mainland companies, fluctuated between a 2.7 percent gain and a 5.5 percent loss. It finished the day down 656.34 points at 17,317.53, having earlier struck a life high of 18,463.73.
HSBC, the day's most traded stock, jumped 2.6 percent to HK$147.70. Goldman Sachs said in a report that it was raising its 12-month price target to HK$161 from HK$158. Property shares tumbled following an extended rally prompted by September's US rate cut, with the Hang Seng property sub-index slumping 5.7 percent.
Sun Hung Kai Properties dived 8.5 percent to HK$127.90. Cheung Kong (Holdings) Ltd slid 5.5 percent to HK$126.90. The well-played resources sector also suffered sharp losses, with PetroChina Co Ltd falling 6.3 percent to HK$14. China Coal sank 8.8 percent to HK$22.95. Citic Resources Holdings Ltd dropped 7.6 percent to HK$5.68 after a shareholder sold 260 million shares at HK$5.78 per share, a source close to the deal said.
Hong Kong & China Gas Co Ltd leapt 9 percent to HK$19.72 after Henderson Land Development Co Ltd said it planned to pay $5.5 billion for unit Henderson Investment Ltd's stake in the city's piped gas distributor, putting the final touches to a group reorganisation. Henderson Investment shot up 8.4 percent to HK$13.98 and Henderson Land finished at HK$59.40, down 3.7 percent.
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