Asian stocks fell across the board yesterday after the European Central Bank lent more money than expected to euro-zone banks, shattering the optimistic view that the region's debt crisis might finally be under control.
The Hang Seng Index ended its two-day rally, sliding 38.22 points, or 0.21 per cent, to close at 18378.23 yesterday. Its daily turnover dropped to another record-low for the year, totalling only HK$33.4 billion.
Global consumer products trading company Li and Fung, which is heavily exposed to the vagaries of global trade, led the chart of worst-performing shares in terms of percentage loss. It shed 2.9 per cent, or 42 cents, to close at HK$14.14.
China PingAn and Citic Pacific dropped 1.8 per cent and 1.6 per cent respectively.
The Standard and Poor Asia ex Japan 200 index dropped 1.18 per cent. Stock exchanges in Shanghai, Shenzhen, Taiwan, Seoul and Tokyo all slipped into negative territory.
Francis Cheung, head of China-Hong Kong strategy for brokerage firm CLSA, said the market was currently dominated by pressure to sell and there was little appetite to buy.
Cheung predicted the stock market in Hong Kong would remain weak until after the Chinese New Year holiday in January, when the central government was likely to announce a cut in reserve requirement ratio for banks. He also expected the Hang Seng Index to reach only 21,700 next year, overshadowed by the euro zone crisis but still cushioned by solid growth in the mainland economy.