AN overnight fall on Wall Street and continuing rumours about the death of China's paramount lead Deng Xiaoping yesterday caused the market to fall by nearly two per cent.
The Hang Seng Index finished the day 143 points down, or 1.94 per cent, to close at 7,278.
Turnover was $2.6 billion, about $140 million up on Thursday's trading, but still thin.
Brokers said trading generally lacked direction with the market largely moving sideways after the early morning fall.
There was a late afternoon surge as local buyers also took advantage of low prices to rebuild portfolios and companies bought back stock.
Brokers said a lot of their sellers were also locals who had decided to reduce positions having given up on their punt on a Lunar New Year rally. Most believe the market will continue to suffer from the jitters until their is a clear direction on both interest rates and the health of Mr Deng.
Andrew Mathers, a director of Morgan Grenfell, said: 'People are adopting a position of wait and see. They need a bit more evidence that the market is good value. They want to see interest rates peak, they want to see demand for flats increase, they want to see market stability.' James Osborn, director of Baring Securities, said much of the selling was a 'knee-jerk' reaction to persistent market rumours.