Hong Kong shares close lower on heightened worries over US economy

Hong Kong shares closed Monday lower as worries over a likely recession in the US were exacerbated by the rise in the US unemployment rate to its highest level in two years in December and fewer-than-expected jobs addition to non-farm payrolls.

Monday's slump was led by mainland banks and shares in export-oriented companies, such as Chinese consumer goods supplier Li & Fung and Taiwanese mobile component manufacturer Foxconn International Holdings (FIH).

The Hang Seng Index closed down 340.20 points or 1.2 percent at 27,179.49, off a low of 26,698.54 hit in the morning session.

Turnover was 113.53 billion Hong Kong dollars.

Property stocks staged a slight rally in the afternoon session, pulling the overall benchmark index out of its lows.

The property index was up 561.65 points or 1.5 percent at 38,452.46.

"Investors are expecting a rebound in the US and European markets today, following weak closing (levels) in previous sessions," said Conita Hung, head of research with Delta Asia Securities.

Li & Fung, which supplies consumer products to US retail giant Wal-Mart, tumbled 2.05 dollars or 6.6 percent to close at 28.95.

FIH skidded 1.02 dollars or 6.2 percent to 15.54 dollars.

(1 US dollar = 7.80 Hong Kong dollars)