HK index drops on global economy worries
HONG KONG (AP) -- Hong Kong's key stock index tumbled nearly 5 percent Monday as rescue plans by the U.S. and Europe to bail out the financial sector failed to lift investors' sentiments.
Sudan, Chad sign peace dealThe blue chip Hang Seng Index dropped 878.6 points, or 4.97 percent, to close at 16,803.76.
Investors are worried that the latest bailout package by Germany to rescue Hypo Real Estate and the U.S. House of Representatives' passage of a $700 billion bank bailout on Friday will do little to avert a significant global economic slowdown.
"Banks are collapsing one by one. Investors have already lost all their confidence," said Francis Lun, general manager at Fulbright Securities Ltd. "They are now worried if there will be more banks shutting down."
Lun said he sees no sign of any upward movement in the near future.
On Sunday, Germany became the latest country to launch a bailout plan, amounting to 50 billion euros ($69 billion), to rescue Hypo, the country's second-biggest commercial property lender.
"The economic turmoil has now spread to Europe which further hurt sentiments," said Castor Pang, analyst at Sun Hung Kai Financial.
Mainland Chinese stocks were lower Monday, tracking sharp losses in China's bourses which was catching up with global market weaknesses following a weeklong holiday. The benchmark Shanghai index tumbled 5.3 percent to 2,173.74.
Chinese banks China Construction Bank plunged 7.3 percent to HK$4.45. ICBC, China's leading lender, shed 5.7 percent to HK$4.1 and China Merchants Bank also shed 8.2 percent to HK$16.6.
Energy stocks also dropped amid concerns that a global economic meltdown would dampen demand.
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