Hang Seng closes flat after roller-coaster ride

Hong Kong shares recovered from a 26-month low to close flat yesterday, helped by late buying in Chinese stocks following a coordinated effort from global central banks to ease a funding squeeze in money markets.

The blue-chip index at one point slid as much as 7.7 percent as investors dumped Chinese financial stocks amid a crisis of confidence in global financial markets.

"The slide in the morning was ridiculous and the sell-off in some stocks in particular was irrelevant and irresponsible. The weak sentiment was partly to blame but people were mostly just following the Chinese markets," said Peter Lai, director with DBS Vickers.