Hong Kong stocks ended near a three-month low on Monday, falling 2 percent on worries about slowing US economic growth. "It's a fundamental correction. It's a fundamental adjustment in the outlook for the US economy," said Francis Lun, general manager at Fulbright Securities. All 33 component stocks in the blue-chip Hang Seng Index ended in negative territory in the heaviest volume so far this month with HK$21 billion (US $2.7 billion) worth of shares changing hands.
The blue-chip Hang Seng Index fell 2.08 percent, or 283.52 points to 13,355.23, just shy of a 2005 low of 13,320.53 tapped in late January.
The index of China enterprise shares, better known as H-shares, took an even bigger beating, falling 3.15 percent to 4,572.35 as investors worried that a slow down in the US economy could hurt demand for exports and raw materials in booming China.
Hong Kong stocks did not slide as far as other Asian bourses such as Japan and Korea, which were hammered by growing concerns about economic growth and heightened tensions between Japan and China.
But some analysts said Hong Kong was unlikely to outperform other Asian markets in the medium term.
"Hong Kong is not more cushioned than anyone else in Asia. We are quite concerned about Hong Kong because of the prospects of interest rates rising higher than expected," said Daryl Goh, a strategist at HSBC.
Analysts said mounting Sino-Japan tension following a weekend of anti-Japan protests in cities such as Shanghai was also having a negative effect on local sentiment.
"I think there's going to be further disturbances. That's why people want to leave the market and wait," said Alfred Chan, chief dealer at Cheer Pearl Investment.
But most analysts believe the risk to shares such as automaker Denway Motors, a joint venture with Japan's Honda Motors will only be short term. Denway fell 3.7 percent to HK$2.625.
Top China computer maker Lenovo Group was the top blue-chip loser, falling 6.9 percent to HK$2.35 after the world's largest computer firm IBM tumbled more than 8 pct a day after reporting lower-than-expected returns.
Lenovo is in the process of buying IBM's personal computer business.
China commodity shares such as oil refiner Sinopec Corp and Aluminum Corp of China Ltd (Chalco), lost steam on the back of weakening oil prices and signs of a global economic slowdown. Sinopec fell 4.8 pct to HK$2.975. Chalco fell 3.9 percent to HK$4.30.
China's largest non-life insurer PICC Property & Casualty fell 4.4 percent to HK$2.175 with investors worried about a delay in the firm's earnings.
"The PICC results delay is a disaster. Delays to reporting results typically prompt investor concerns of disagreement with auditors," Macquarie Bank wrote in a research note.
The market shut ahead of earnings from China's two largest life insurers, China Life Insurance and Ping An Insurance.
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