Hong Kong stocks fall by 2.4% on Thursday

Hong Kong shares fell on Thursday, due to higher crude-oil prices. Chinese banks led the decline over concerns that China may further tighten credit to cool its booming economy.

The Hang Seng Index opened at 27,050.03 points, down 673.24 points or 2.4% to close at 26,887.28 points, with an intraday high of 27,223.71 points. Turnover was HK$90.1 billion. The China Enterprise Index sank 3.4% or 542.15 points to 15,464.66 points.

All four major categories performed weakly. The Finance moved down by 2.75%, being the weakest, the Commerce and Industry fell by 2.36%, the Properties fell by 2.04% and the Utilities 1.31%.

The weak performance was led by China-related stocks including companies from industries of banking, insurance, telecoms, petroleum and electricity. Industrial & Commercial Bank of China<601398> <1398> fell 6.28% or HK$ 0.35 to HK$5.22. China Construction Bank<601939><939> dropped by 5.53% or HK$0.36 to HK$6.15. Bank of Communications<601328><3328> skidded 4.84% or HK$0.52 to HK$10.22. Bank of China<601988><3988> moved down by 1.88% or HK$0.07 to HK$3.66.

The three insurers, China Life<601628><2628>, Ping An<601318><2318>and PICC P&C<2328> dropped between 2.97% and 4.71%.

Hit by rising crude-oil prices, PetroChina<601857><857>, the world's largest company by market capitalization, moved down by 2.9% to HK$13.20. Sinopec<600028> <386> dropped 4.5% to HK$11.10.

Given the speculation that China will start the long-awaited industry restructuring of China's telecom industry in 2008, China Mobile<941> was down 2.57% to HK$132.70 , China Unicom<600050><762> went down 4.85% to HK$14.68 , Netcom<906> moved down by 2.13% to HK$22.95, along with China Telecom<728>, which dropped 1.61% to HK$6.13.

MTR Corporation Ltd<66> moved up 3.3% to HK$31.80, bucking the downward trend since the de-facto developer is expected to get upgraded ratings due to a strong local property outlook.

Analysts consider the overall situation of the U.S. another crucial reason for the slide. Investors are worried that there could be correction in the U.S. and European markets. Insiders believe the U.S. non-farm payrolls report due on Friday will, no doubt, provide a crucial reading indicating a continuous slide for U.S. economy.