HK's index posts biggest weekly fall - Jongo News - Daily News of China

HONG Kong's stocks slid last week, pushing the Hang Seng Index to its biggest weekly drop in five months, on concern losses linked to US subprime mortgages will lead to tighter lending conditions and damp global economic growth. HSBC Holdings Plc declined.

"The issue is more severe than initially expected," said Pauline Dan, who helps manage US$2.2 billion of assets at Manulife Asset Management in Hong Kong. "We're increasing our cash level. Investor sentiment is cautious."

The city's stock market shut early at 2:45pm on Friday, after the city raised typhoon signal No. 8 as winds caused by a tropical cyclone strengthened. HSI Services Ltd said it will postpone announcing the results of the Hang Seng Index's quarterly review, Bloomberg News said.

The Hang Seng Index lost 646.65, or 2.9 percent, to 21,792.71. It has lost 3.3 percent this week, the biggest decline since the period ended March 2. The Hang Seng China Enterprises Index, which tracks 41 mainland companies' so-called H shares, fell 3.2 percent.

HSBC, Europe's biggest bank by market value, slid HK$2.40, or 1.7 percent, to HK$142.10 (US$18.17). Its North American earnings in the first-half slumped 35 percent to US$2.44 billion because of loan defaults by subprime borrowers, the lender said on July 30.

Li & Fung Ltd, which sells goods to Wal-Mart Stores Inc, fell HK$1.20, or 4.4 percent, to HK$26.05, its biggest decline since March 14. Yue Yuen Industrial (Holdings) Ltd, the world's largest maker of sports shoes for brands such as Nike Inc, lost 30 cents, or 1.2 percent, to HK$24.

US stocks slumped on Thursday by the most in more than five months after BNP Paribas SA barred withdrawals from funds that owned subprime, or higher risk, loans. Countrywide Financial Corp, the biggest US mortgage lender, said after US markets closed that "unprecedented disruptions" in the home-loan market may crimp its ability to lend, which would erode profit.