Hang Seng slides 1.3pc on euro zone fears

Hong Kong shares fell 1.32 per cent on Tuesday, losing all their gains for 2013 after elections in Italy failed to produce a winner, fuelling fears of gridlock that could spark a new crisis in the euro zone.

The benchmark Hang Seng Index slipped 300.39 points to 22,519.69 – below its December 31 close of 22,656 – on turnover of HK$67.96 billion.

In Italy results from Sunday’s election indicated there would be no clear winner, while the biggest gainer was a protest party run by a popular comedian.

The polls show that while the leftists won the lower house, the party run by former prime minister Silvio Berlusconi had more seats in the upper house.

Investors fear the outcome will lead to political stalemate in the country and a possible return to the dark days of the region’s financial crisis if austerity measures introduced to cut Rome’s huge debt pile are reversed.

On Wall Street, the Dow tumbled 1.55 per cent in its biggest single-day drop since November, while the S&P 500 dived 1.83 per cent and the Nasdaq sank 1.44 per cent.