Investors exchange opinions at a securities firm in the Central district of Hong Kong on Friday. Hang Seng Index dropped 528.71 points to 17,682.4 on continued uncertainties about the US economy and doubts over a huge bailout plan for financial markets, dealers said. AFP

Hong Kong's benchmark Hang Seng Index (HSI) on Friday fell 2.9 percent or 528.71 points to ease at 17,682.4 on fears of US economic slowdown.

With the fate of the $700 billion bailout plan still hanging in the balance, the sentiment of Hong Kong investors turned cautious, with the HSI making a 422-point fall at opening on Friday.

Index movers HSBC and China Mobile performed sluggishly. Shares of the former dipped 0.32 percent to close at HK$123.20, while China Mobile dropped 3.26 percent to HK$77.10.

Hang Seng Bank extended its slide on Friday after the lender revealed its exposure to the debt securities of the failed Washington Mutual (WaMu) on Thursday. Shares in Hang Seng sank 5.93 percent to HK$123.70.

JPMorgan said shares of Hang Seng will continue to be under short-selling pressure unless the lender clarifies its exposure to the debt securities of WaMu.

Although the central government is expected to unveil new policy to revive the property market, performances of mainland property stocks were mixed.

Shares of heavyweight China Overseas outperformed peers to advance 2 percent to HK$10.20. Another giant R&F Properties closed at HK$7.60, down 3.55 percent.

Mainland banking stocks fell along with the market plunge. Shares of China Construction Bank dropped 4.82 percent to HK$4.80. ICBC fell 3.75 percent to HK$4.36, while Bank of China shed 5.22 percent to HK$2.90.

Shares of China Resources Logic soared 30 percent to HK$2.85 as the company announced its plans to acquire 22 urban gas projects from its parent group and a stake in an industry rival.

The mainland's largest coal producer China Shenhua Energy saw its shares down by 5.18 percent, while China Coal Energy lost 5.54 percent to close at HK$8.00.

The fall of HSI precipitated in the afternoon as the index finally ended at 17,682.4, 528.71 points lower. Daily turnover was about HK$53.27 billion.

Hang Seng China Enterprises Index went down 317 points to ease at 9,013.

Sun Hung Kai Financial Strategist Castor Pang said the market was losing momentum without clear direction. "Market eyes on whether the US rescue plan will receive the approval from the US House of Representatives on Friday... Investors, therefore, have taken a wait-and-see approach."

Independent equity analyst Lai Wai-shing believed the index might climb back to the 18,200-level next week when a clearer picture of the US economy will emerge. "Index constituents such as China Mobile and HSBC are expected to see a rebound," Lai added.

(HK Edition 10/04/2008 page2)