Property and banking shares suffered the most in yesterday's 2.56 per cent plunge by the Hang Seng Index. Investors sold on fears that rising US bond yields would prompt an increase in the territory's rates. US 30-year bond yields surged toward the 7.2 per cent level on Friday, up from about 6.94 per cent, following the release of stronger than expected employment figures. Yesterday, the HSI closed at 10,890.05, down 287.08 points. Turnover was a heavy $6.24 billion, compared with $4.29 billion on Friday. Losers swamped advancers by 460 to 74, with 296 stocks unchanged. Despite the sharp losses, many brokers and analysts were confident that the fall represented a short-term setback, pointing to an attempted rebound in the late session as an indication of firm sentiment. Edward Chan, research director at Standard Chartered Securities, said: 'Today's fall was a bit exaggerated, especially when people do not know if rates are going up or not. 'When investors come to their senses, they will not add much selling pressure.' The futures market also saw heavy losses, with July futures closing down 310 points at 10,870. Brokers said US investors were selling heavily. As the July futures index broke 10,900, stop-loss selling became evident, sending July futures down to the 10,840 level, where bargain hunting appeared. August futures also closed sharply down at 10,920 points, but managed to maintain a 30-point premium to the underlying cash market. Banks lost heavily as analysts said that besides the rates threat, the sector was ripe for a correction after weeks of solid advances. Property stocks dived as investors feared that higher rates would smother the newly resurgent property market. Even utility shares, which normally serve as a haven for investors during a bear market, fell. It was stocks of smaller firms that tended to outperform the market. Garment trader Easyknit International surged 9.5 per cent to close at $3.75 after it said it planned to list as much as much as 20 per cent of its share capital on the Singapore market. Furama Hotel closed up 3.76 per cent at $13.80 after it announced its profits rose 38 per cent in the year to March 31. In the near term, the market will remain unstable pending the release of further US economic statistics. US producer price figures will be released on Friday, and consumer price figures will come out on Monday.