Hong Kong stocks tumble 3.47 percent yesterday, dragged by sharp losses on Wall Street last week and possibly another round of monetary tightening policies on the mainland. The Hang Seng Index fell 856.59 points to close at 23,811.2. AP

Hong Kong stocks dropped sharply yesterday with financial and property firms taking the worst hit on worries that upcoming economic data on the mainland will prompt another round of monetary tightening measures.

The National Bureau of Statistics will announce first-quarter economic data, including GDP and inflation figures this week.

"There are many watchful eyes on the data released by Beijing this week. Investors worry that the data would trigger a package of austerity measures to cool down the economy," said Ben Kwong, head of research at KGI Asia.

And the market is expecting a correction after recent gains, he added.

The benchmark Hang Seng Index dropped 856.59 points, or 3.47 percent to 23,811.20 points. The China Enterprises Index of Hong Kong-listed companies, or H-shares, tumbled 692.91 points, or 5.2 percent.

Mainboard turnover was HK$74.8 billion compared to HK$77.14 billion on Friday.

Wall Street's fall in response to General Electric's lower-than-expected earnings posted on Friday also shadowed the Hong Kong market.

The US markets slumped on Friday after General Electric reported a 6 percent drop in first-quarter net profits and cut its forecast for the full year. The conglomerate blamed a weak environment for its financial services divisions for the earnings drop.

Making the local sentiment worse, a survey by the University of Michigan showed US consumer sentiment at a 26-year low.

"Sharp falls on Wall Street and mainland bourses weighed on Hong Kong," said Linus Yip, a strategist at First Shanghai Securities.

Investors are now waiting for other US giants to report earnings.

"People are worried that they may perform poorly in the first quarter," said Castor Pang, strategist at Sun Hung Kai Financial Group.

Citigroup and Merrill Lynch are set to announce their January-March results and analysts fear the two banks could report more losses on subprime-related investments.

Mainland financial stocks weighed on the market, dragging the financial sub-index 3.6 percent lower.

China Construction Bank had the biggest hit with shares ended nearly 6 percent lower to HK$6.32.

ICBC dropped 5.9 percent; Bank of Communications down 2.28 percent to HK$0.24.

China Merchants Bank sagged HK$0.7 or 2.35 percent to HK$29.15.

Among local banks, the Hang Seng Bank was down HK$2.8 or 1.92 percent at HK$143. Bank of East Asia fell 3.8 percent to HK$40.55, and Bank of China (Hong Kong) tumbled 1.66 percent.

Gold miners were lower after a drop in gold prices, with Lingbao Gold sliding 3.56 percent and Zijin Mining losing HK$0.22 and closed at HK$7.72.

(HK Edition 04/15/2008 page4)