Hong Kong stock prices will plunge further as soaring oil prices have set off a global recession, dealers said. For the week ending September 5, the Hang Seng Index dropped 6.2 percent, or 1,328.61 points, to 19,933.28. Friday's close marked the first time the benchmark index fell below the key 20,000 points level over the last 17 months.
Analysts said the struggling global economy would continue to add pressure to the stock market until the end of this year. "The US, Japan and the European Union have all entered into a recession. Although oil prices have eased a little this week, the damage has already been done," Francis Lun, general manager of Fulbright Securities, told AFP.
The downturn in export growth was already very noticeable in exporting countries such as China, he said. "Share prices next week will sink into a black hole. There is no silver lining in the clouds at this stage," he said.
Lun said he believed the market will find support at the 19,000 level next week and advised investors to wait until Christmas if they want to grab low-price stocks.
Alex Wong, fund manager at Ample Financial Group, also believed the market's short-term prospects were gloomy. "What we are seeing is a large-scale liquidation of stocks, and the money leaving the market isn't coming back any time soon," he told Dow Jones Newswires.
"The outflows are set to continue, and with no clear signs of a rebound in external markets, the trend for now still looks quite negative," said Castor Pang, strategist at SHK Financial.