The Hang Seng Index hit a two-and-a-half-year low yesterday amid fears of global recession, with short selling of Hong Kong stocks now the highest in terms of turnover since 1998.
The Hong Kong benchmark plunged 770.26 points, or 4.38 per cent, to close at 16,822.15 points - underperforming the rest of Asia.
Apart from South Korea, which gained 0.02 per cent, Taiwan lost 2.93 per cent, Australia dropped 2.78 per cent and Japan fell 1.78 per cent.
Stock markets on the mainland are closed this week for the National Day holiday.
Ping An Insurance was the biggest loser in the Hang Seng Index yesterday, plunging 13.35 per cent to close at HK$38.30.
Banking stocks continued their losing streak. Bank of East Asia declined 7.45 per cent, Bank of Communications dropped 7.04 per cent and Bank of China fell 6.53 per cent.