The Hong Kong share market finished a turbulent trading session 1.17 per cent lower yesterday, with index futures trading dominating activity ahead of the expiry of the May contract.
The Hang Seng Index fell 105.49 points to close at 8,877.94, a new four-month low, after earlier touching an intraday high of 9,066.79.
Brokers said an anticipated massive short squeeze ahead of the expiry of the May futures did not take transpire.
Arbitrageurs were said to have taken advantage of strong selling by hedge funds of the June future, which saw 25,336 contracts traded.
Lippo Securities director Eugene Law Ka-kin said confidence remained fragile particularly as so much attention was focused on the futures market. 'The foreign houses have taken on some big positions and that means we are going to see some swings in the market,' he said.
Open positions have built up to more than 80,000 contracts.
