HK stocks nosedive to 23-month low amid global turmoil on Lehman Brothers

Hong Kong's benchmark Hang SengIndex plunged over 1,000 points to their lowest close in nearly 23months Tuesday, tracking U.S. and regional stock markets, amid worries of a global financial turmoil after investment bank Lehman Brothers filed for bankruptcy protection.

The benchmark Index plunged 1052.29 points, or 5.44 percent, to close at 18,300.61 Tuesday, its lowest closing level since Oct. 27,2006, when it settled at 18,297.

Turnover rose to 88.42 billion HK dollars from last Friday's 57.77 billion HK dollars . The local market closed for a three-day holiday from last Saturday to Monday.

The benchmark Index opened 1,027-point, or 5.31 percent lower at 18,325.65 Tuesday, and fell to the low of 18,019.20 in the early morning session and moved to the high of 18,538.51 in the afternoon session.

All the four major sub-indices lost ground. The commerce and industry sub-index plummeted most at 6.58 percent, followed by the finance at 5.37 percent, the properties at 3.37 percent and the utilities at 1.88 percent.

Hong Kong Exchanges and Clearing Limited, the local market operator suspending the trading right of LEH's subsidiary was down4.25 percent to 89.0 HK dollars.

Blue-chip heavyweight HSBC, which accounts for the largest weighting of the Hang Seng Index, dropped 3.4 percent to 118.00 HK dollars as the heavyweights tracked the broad weakness.

Blue-chip heavyweight China Mobile, the largest mobile phone operator in the country and the market's largest stock measured by capitalization, fell 6.1 percent to 71.65 HK dollars.

Coal miner China Shenhua plunged 11 percent to 19.42 HK dollars on concerns the slowdown in China's economy may hurt the coal demand.

China's largest offshore oil producer CNOOC fell 8.6 percent to8.56 HK dollars on falling crude oil prices. Light, sweet crude oil futures for October delivery were trading at 92.18 U.S. dollars a barrel at 0730 GMT in the Globex electronic session, down 3.53 U.S. dollars from Monday's settlement on the New York Mercantile Exchange.

Utility stocks declined less than the broader market. HK and China Gas to expedite expansion of mainland natural gas business was down 1.2 percent to 18.06 HK dollars. HK Electric down 1.31 percent to 48.95 HK dollars.

The three insurers tumbled across the board. China Life, the country's largest insurance company, was down 3.47 percent to 26.45 HK dollars. Ping An went down 9.82 percent to 47.3 HK dollars. PICC P&C went down 20.21 percent to 3.08 HK dollars.

Chinese mainland's surprise rate cut overnight also weighed on Hong Kong shares' performance. China's central bank said late Monday it will cut its one-year benchmark lending rate by 27 basis points from Tuesday, the first policy easing in over six years and an unambiguous shift toward boosting economic growth from combating inflation.

The People's Bank of China also said it will lower the reserve requirement ratio for smaller financial institutions from Sept. 25.

But it left the deposit rate unchanged, raising concerns over the profit margin of Chinese banks, which fell sharply.

China's largest lender Industrial and Commercial Bank of China slumped 7.3 percent to 4.45 HK dollars. Bank of China, the country's second largest bank, fell 8.4 percent to 3.04 HK dollars and Bank of Communications was 7.4 percent lower at 7.24 HK dollars. China Construction Bank, the third largest bank in China, dropped 8.2 percent to 5.15 HK dollars.

Source:Xinhua