Hong Kong stocks close 4.84% lower on Dubai woes

20:16, November 27, 2009      

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Hong Kong stocks dived 1,075.91 points, or 4.84 percent to close at 21,134.5 on Friday amid sell- off triggered by the Dubai debt concerns,

The benchmark Hang Seng Index lost as many as 1,208 points, or 5.4 percent to 21,002 near the end of the afternoon trading, the largest drop of the gauge since Dec. 12 2008. The session finished1,075.91 points lower on a hefty turnover of 107.51 billion HK dollars (13.89 billion US dollars).

Dubai said on Wednesday it would ask creditors of state-owned Dubai World and Nakheel for delay in the payment of billions of dollars of debt as a first step towards restructuring.

Market observers said if the city should turn out not being unable to pay the debt, many world leading banks will suffer great loss.

Heavyweight HSBC, which is reported to be among Dubai's debtors, plunged 7.59 percent to 87 HK dollars, suffering the biggest loss among the 42 constituent stocks.

Other financial stock on the Hong Kong market also bore the brunt of the Dubai woes, sending Hang Seng Index into deeper retreat.

China's biggest commercial lender ICBC, following HSBC on the daily turnover chart, slumped 5.3 percent to 6.26 HK dollars and Bank of China dived 5.06 percent to 4.13 HK dollars. Both of the bank said earlier on the day that they did not possess any bonds issued by the Dubai government or the state-owned Dubai World conglomerate.

China Construction Bank slid 4.79 percent to 6.56 HK dollars and Bank of Communication went down 4.03 percent to 8.81 HK dollars.

Aside from the financial stocks, share prices of the rest of the Hang Seng Index constituents faced erosion of different degrees.

The commence and industry sub-index retreated 4.35 percent, followed by the property sector with a decline of 3.47 percent. The utility stocks, which are long believed to be the safest investment on the stock market, did outperform the general market by falling 1.7 percent.

Source: Xinhua
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