More uncertainties lead to more market selling yesterday, and the HSI found itself below 14,000 for the first time in more than three years. AFP

Tracking a drop in the US stock market, the Hang Seng Index (HSI) fell below 14,000 mark yesterday for the first time since July 2005.

Intensified panic selling dragged the market to close at 13,760, down 506 points. Some investors feared the global slowdown will erode demand for raw materials.

As a result, the HSI lost its footing and plunged as much as 663 points, settling to 13,603 at the afternoon break. The afternoon rebound was minimal as heavyweight index constituents such as HSBC and China Mobile were under heavy short-sale pressure.

Daily turnover amounted to HK$56.4 billion.

The Hang Seng Chinese Enterprises Index, which mirrored the performances of mainland enterprises, fell 4.44 percent to 6,403.

Shares of HSBC dropped 3.08 percent to HK$100.60, and China Mobile fell HK$2.45 to end at HK$61.50.

Buoyed by the central government's stimulating housing policy, mainland property stocks made a notable rebound. China Overseas Land soared 8.1 percent to HK$9.20. R&F Properties and Country Garden rose 4.62 percent and 2.38 percent, settling at HK$5.20 and HK$1.72, respectively.

China Shenhua Energy, the mainland's biggest coal miner, plunged 7.69 percent to HK$13.20. Another coal giant, China Coal Energy, lost 7.27 percent to HK$4.21.

CNOOC, the mainland's largest offshore oil driller, lost 8.06 percent to HK$5.36, while PetroChina decreased 5.07 percent to HK$5.62.

Shares of China Merchants Holdings (International) shed 9.4 percent to HK$16. And Orient Overseas International lost 10.28 percent to HK$12.74.

ICBC, the mainland's largest lender in terms of market value, dropped 3.95 percent to HK$3.40. China Construction Bank closed at HK$3.18, down 3.05 percent. Bank of China lost 2.63 percent to HK$2.22.

CASH Asset Management Associate Director Patrick Yiu said the index might test the bottom at 13,500 in the near future.

"The short-term trend of the HSI still depends on the external economy," Yiu said. "Although the newly released housing policy will boost mainland property stocks, only a few of them will be virtually benefited. In the short run, investors can park their money in heavyweight index constituents such as HSBC."

Taifook Asset Management Portfolio Manager Nancy Lee said the financial tsunami will not be over in the near future, and its impact has severely undermined investor confidence.

(HK Edition 10/24/2008 page2)