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HK stocks end sharply lower as techs, region down

HONG KONG: Hong Kong stocks fell sharply on Monday, following other Asian markets as investors dropped high-tech stocks ahead of Taiwan's presidential election and possible US interest rate hikes.

The benchmark Hang Seng Index shed 4.12 percent or 735.18 points to close at 17,096.68, erasing last week's gains. The index is now just slightly higher than its close on March 2. Hong Kong's Internet and high-tech stocks also suffered after the fall in major Internet plays in Japan on Friday, Hutcheson added.

On Monday Tokyo stocks were again pulled lower by high-tech powerhouses such as Softbank Corp and Hikari Tsushin Inc.

The benchmark Nikkei was down by more than three percent in early afternoon trade.

Pacific Century CyberWorks (PCCW) which has close business dealings and cross shareholdings with Hikari, fell to HK$20.50, a drop of 7.45 percent.

"What is holding PCCW up is its deal (to merge) with Hong Kong Telecom (C&W HKT)," said David Williamson, sales director at China Everbright Securities.

"Without Hong Kong Telecom, the assumption would be that PCCW would now be back around $14.00."

Golden Power International Holdings, which is 51 percent owned by Softbank and 20 percent by tumbled 10.79 percent or HK$1.15 to HK$9.50.

Tom.com Ltd, Cheung Kong Group's Internet portal arm, lost 11.01 percent or HK$1.30 to HK$10.50. Red chips followed Taiwan stocks down as investors shed shares ahead of Saturday's presidential elections, sending the Taiwanese index down a record 6.55 percent to 8,811.95.

China-backed companies listed in Hong Kong followed suit, plummetting 4.60 percent. China's largest computer maker Legend Holdings Ltd fell 12.5 percent or HK$1.75 to HK$12.25.

Also hit in the morning were rate-sensitive banks and developers as investors remain cautious ahead of economic news from the US that might hint at interest rate hikes.

Dao Heng Bank Group Ltd led blue chip banks downwards while Sun Hung Kai Properties Ltd pushed developers lower.

The US Federal Reserve meets on March 21 and reports on wholesale and retail prices due this week could give hints of any rise in inflation.

Hutchison Whampoa Ltd kept the market from falling lower as the conglomerate continued to gain after announcing another e-commerce venture last week.

Hutchison, the most actively traded stock, added HK$1.50 to HK$148.00 after hitting a record HK$153.50.

March index futures fell 440 points to 17,305. Total turnover was HK$9.48 billion. -Reuters