Hong Kong stocks slid yesterday as Wall Street losses prompted investors to pocket the previous session's sharp gains, while resource stocks suffered from a broad-based sell-off in commodities.

The benchmark Hang Seng Index closed down 3.5 percent, or 758.72 points, to end at 21,108.22, a 5.1 percent loss for the week.

The China Enterprises Index of H-shares, or Hong Kong-listed shares in mainland companies, fell 5.3 percent, or 602.55 points, to 10,836.20.

Mainboard turnover yesterday was HK$83.3 billion compared with Wednesday's HK$98.7 billion.

PetroChina Co Ltd, the world's most valuable energy producer, tumbled more than 8 percent at one point after earnings came in below expectations. Its shares closed down 6.8 percent at HK$9.17.

Adding to the selling pressure was a rush by investors to lighten their load on the last trading day before a four-day Easter weekend.

But many brokers and strategists said the market should turn a corner soon.

"I think the chances of a bear rally are gaining some traction sooner rather than later," said Matt McKeith, head of equity dealing at First State Investments. "A combination of the Federal Reserve (Fed) and the over-speculation on the downside have lifted some of the pressure."

"Funds have large cash balances in the new quarter which have to go somewhere," McKeith added.

The Fed on Tuesday cut rates by a hefty three-quarter of a percentage point and better-than-expected results at investment banks helped ease some angst about the ongoing credit crisis.

Reuters

(HK Edition 03/21/2008 page2)