H.K. stock prices dive 3.25 pc on Dow fall, rate fears

Asian Economic News, Jan 24, 2000

HONG KONG, Jan. 19 Kyodo

Hong Kong share prices tumbled 3.25% Wednesday following a fall on Wall Street and worries about a possible U.S. interest rate increase.

The Hang Seng Index ended at 15,275.34, down 513.86 points from Tuesday's close.

Turnover on Wednesday was valued at 15.55 billion H.K. dollars (2 billion U.S. dollars).

Several blue-chip stocks that made sharp gains recently, including China Telecom, Hutchison Whampoa and Cheung Kong Holdings, saw a drop in their prices, pulling down the Hang Seng, traders said.

The sub-index for commercial and industrial stocks posted a 4.08% drop while finance shares went down 2.89%.

Alan Pau, associate director of South China Securities Ltd., said investor psychology was dampened by the selling overseas overnight.

Some investors also began to pull capital out of Hong Kong after using the territory as a safe haven to ensure a smooth transition toward 2000, Pau said.

That, in turn, sent share prices down and particularly put selling pressure on blue chips, he added.

Traders anticipate the Hong Kong market will remain in the thrall of U.S. stocks and the yield on U.S. treasuries.