HONG KONG - Hong Kong's Financial Secretary John Tsang said on Friday that Hong Kong's economic fundamentals are strong and trading of HK shares was conducted in an orderly manner today.

Hong Kong's share prices dropped by 938.6 points on Friday, with a turnover of HK$124.7 billion.

Tsang said that the results of the regular stress tests for banks and the securities sector conducted by the Monetary Authority and the Securities and Futures Commission showed the industry is capable of responding to market fluctuations.

In Tsang's opinion, the fall in share prices was triggered by market conditions worldwide and a plunge in share prices in the US and Europe. The market is worried about a deepening of the Eurozone sovereign debt crisis and reduced confidence in the prospects of the US economy, particularly in view of the sustained decrease in the Purchasing Managers Index. This is the main cause of the fall in share prices in Europe and the United States.

He added that the government is monitoring global developments and the local market to ensure its smooth operation, and advised small investors to beware of market fluctuations, and exercise caution and act sensibly.