THE Hang Seng Index fell sharply yesterday in early trading but regained some lost ground to finish 166 points down.
Sluggish trading was dogged by rumours about the health of Chinese paramount leader Deng Xiaoping and the impact of the Hong Kong Monetary Authority's intervention to strengthen the dollar.
The barometer dropped by 2.3 per cent on a moderate turnover of $3.66 billion to finish at 7,252.
Michael Ng, dealing director of Sassoon Securities, said: 'People are dumping the share regardless of the value of the stock.' Mr Ng, who said the market was oversold, believed it should stabilise around the 7,200 level.
'At that level there is only a small downside.' Ian McEvatt, chief executive of Indosuez Asia Management, added: 'The ability to short the market is exaggerating the normal volatility.' The index finished the morning trading down 216.75 at 7,201.30 with volumes around $1.79 billion compared to about $2.6 during Thursday's entire trading session. Sentiment was weak with trading affected by a report that Mr Deng's daughter, Deng Rong, had said in an interview with The New York Times that his health has declined significantly.
Companies with big operations on the mainland were the hardest hit.
