Hang Seng Index skids on fears of China's tightening measures

Hong Kong stocks trimmed the previous sessions' gains and tumbled sharply on Thursday pacing U.S. and the domestic shares markets woes amid renewed concerns following news that the mainland authorities would impose tightening steps to tame inflation in the country.

Hang Seng Index, the benchmark, opened much lower at 22,925.42 points in the morning session. After fluctuating between 22,251.24 and 23,007.61 points, the blue-chip Hang Seng Index shot down 1,121.12 points, or 4.79% to close at 22,301.64. Mainboard turnover lifted on to HK$106.84 billion (US$13.74 billion), compared with HK$89.91 billion (US$11.55 billion) on Thursday.

Hang Seng China Enterprise Index, which tracks the overall performance of 43 Chinese mainland state-owned enterprises on Hong Kong Stock Exchange, plunged 783.29 points or 6.08% to 12,094.06 points.

The financial shares were among the biggest losers yesterday. The Industrial and Commercial Bank of China<601398><1398>, the largest lender in the country, dropped 5.51% to HK$4.97. China Construction Bank<601939><939>, the third-largest bank by market value, fell 6.11% to HK$5.38. Bank of China<601988><3988>, the second-largest bank, ended down 4.31% to HK$3.11. Bank of Communication<601328><3328> skidded 6.10% to HK$8.47, following its shareholder market heavyweight HSBC Holdings Plc<5>, which shed 2.16% or HK$2.7 to close at HK$122.5.

China Life<601628><2628>, the country's largest life insurer, slumped 6.27% to HK$27.65. Ping An Insurance (Group) Co<601318><2318> slid 4.45% to HK$57.95. PICC P&C<2328> tumbled 6.14% to HK$7.49.

Local property stocks also underperformed on Thursday. Sun Hung Kai Properties Ltd<16>, the largest house developer in Hong Kong, dropped 5.94% to HK$117.2. Henderson Land Development Company Ltd<12> decreased 4.80% to HK$54.6. Cheung Kong (Holdings) Ltd<1>, one of Hong Kong's largest real-estate developers owned by business giant Li Ka Shing, plunged 4.25% to HK$106. Sino Land Company Ltd<83> sagged 10% to HK$17.46.

But shares of China Railway Construction Corp<601186><1186>, China's major railway and construction contractor, climbed by 12% on their debut with expectations that China will continue its infrastructure spending spree, and closed at HK$12.