Hong Kong shares fell 4.4 percent to a three-year closing low on Friday as investors exited equity holdings ahead of the weekend, following a week of sharp gains and steep slides amid looming fears of a global recession. The benchmark Hang Seng Index closed 676.31 points lower at 14,554.21, after advancing to 15,300.07 earlier.
The blue chip index ended the week 1.6 percent lower after a 2-day, 14 percent rally was outweighed by a 13.5 percent drop in the last three days of trade. "The focus of the financial crises has now firmly moved to Asia," said Linus Yip, strategist with First Shanghai Securities.
"Givenve a lot to be worried about." South Korea's KOSPI closed at a three-year low on Friday, while its currency has fallen 17 percent in the last five weeks. Mainland mobile phone operator China Unicom shed 6.7 percent on concerns its merger with fixed-line network China Netcom may hurt earnings. The two companies merged on October 15 and on the same day, China Netcom reported a fall in revenue during the first nine months.
Asia's largest oil & gas producer, PetroChina, slid 6.0 percent on fears that lower oil prices may dent profits. Crude oil prices fell more than $6 a barrel to below $70 overnight on rising US inventories and slowing demand amid a global economic crisis.
Offshore oil producer CNOOC plummeted 6.2 percent, adding to its two-day 14.6 percent slide. Mainboard turnover fell to HK$59.3 billion ($7.6 billion) from HK$64.3 billion at on Thursday. Turnover spiked nearly 11 percent during the 10-minute closing auction window as investors bailed out of the markets ahead of the weekend.
"People are cautious ahead of the weekend in view of the extreme volatility on Wall Street, so the selling pressure remains," said Howard Gorges, vice chairman at South China Securities. "Earnings estimates are being revised down and these are being priced in by the market. People are reckoning that earnings will be adversely affected by the crisis."
Chinese bank shares fell on worries China's slowing economy may cut demand for loans, trim profits and raise bad loans, said Y.K. Lee, an analyst at Core-Pacific Yamaichi. Investors also fretted that US and European banks invested in mainland banks may sell their holdings in the wake of the turmoil in the financial markets.
China Construction Bank dropped 6.7 percent, while No 3 lender Bank of China slid 7.8 percent. The China Enterprises Index of top locally listed mainland Chinese companies tumbled 4.8 percent to 7,007.53. Shares in gold miner Zijin Mining dropped 7.5 percent after the price of the precious metal eased further on Friday, following a 6 percent decline overnight as investors fled commodities, including bullion, and opted for the safety of cash.
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