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HONG KONG - Hong Kong share prices slumped 5.4 per cent in closing trade Wednesday following a tumble on Wall Street as US services sector data renewed fears of a recession in the world's largest economy, dealers said.
The Hang Seng Index closed the holiday-shortened day 1,339.24 points lower at 23,469.46, a far cry from its glory days in October when it nearly touched 32,000.
Turnover was 70.66 billion Hong Kong dollars (9.10 billion US).
The market will remain closed until Monday as the Chinese usher in the Year of the Rat.
In recent months, mounting worries over the state of the US economy, increased inflation in China, a slowdown in Europe and the possibility of recession in Japan have wiped out gains as nervous investors stayed clear of
the market.
"The markets are reacting to the poor service sector data that came out of the US last night," Castor Pang, a strategist with Sun Hung Kai Financial.
"But losses on the Hang Seng and H-share index are overdone compared to other Asian markets like Tokyo. This is because of the liquidation pressure ahead of the long holiday."
Overnight, the Dow Jones Industrial Average lost 370 points, its biggest point drop since August, on weak service sector data.
The Institute for Supply Management said its January index for the service sector, which accounts for about two-thirds of the economy, dropped below 50, a level that indicates a contraction.
Losses were spread across the board, with all 43 Hang Seng Index stocks ending lower.
China Mobile closed down 6.30 at 116.80, HSBC was down 4.90 at 113.90 and Chalco fell 0.96 to 12.30.
Among oil stocks, PetroChina lost 1.08 at 11.14, Sinopec was down 0.82 at 8.77 and CNOOC down 0.68 at 11.78.
Chinese insurers tumbled on reports that claims for property losses in the wake of Chinas most severe winter in five decades had already reached 680 million yuan (93.20 million US dollars).
Insurer PICC lost 0.48 at 7.98, China Life was down 2.50 at 29.40 and Ping An shed 4.90 to 56.70.
Aluminium Corp of China (Chalco), the Hong Kong-listed unit of state-owned Chinalco, slumped as issues surrounding its parent's acquisition of a stake in resources giant Rio Tinto continued to hound the stock.
Chalco fell 0.96 to 12.30 dollars after skidding more than 11 percent in early trade.
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