Hong Kong share prices resumed their dismal form yesterday, falling 7.01 per cent amid rumours that the SAR's fifth-largest developer was in financial difficulties. The Hang Seng Index, the market's lead indicator, dropped 647.57 points to 8,578.98, snapping a two-day gain that had added almost 14 per cent. Brokers said Sino Land set the tone for the day's trade, as its shares went into free fall, shedding 45.42 per cent to end at $1.91. Sino Land officials strenuously denied the firm was having difficulties meeting its repayments, issuing a statement to investors through the Stock Exchange and calling a lunchtime press conference to further state its case. Chairman Robert Ng Chee Siong said: 'The rumours of default are groundless. It's spreading very malicious lies.' The firm made similar statements on Wednesday after its share price fell sharply in London. Analysts said Sino Land was unlikely to be in trouble, despite the higher interest rates caused by the defence of the currency peg, and slump in property prices. It rallied slightly in the UK last night, with Sino stock listed on the Hang Seng London Reference Index ending $0.24 higher at $2.15. Goldman Sachs analyst Benjamin Cheng Wai-ho said: 'The stock looks pretty oversold . . . I find it hard to believe that Sino Land would get into financial stress.' Brokers said investors were wary after Monday's collapse of Hong Kong-based Peregrine Investments. Since the start of the year, the Hang Seng Index has shed almost 20 per cent, losing ground in all but two of the 10 sessions.