Tung Chee-hwa yesterday rejected suggestions that the huge reserve and land fund be used to intervene in the stock market, as the Hang Seng Index fell to a three-year low. The Chief Executive acknowledged the importance of the reserves in maintaining financial stability. But he said: 'Our market operates under a free market mechanism. The Government will not intervene in the stock market.' Mr Tung attributed fluctuations in the stock market to foreign factors. 'The whole of Asia has been affected by the weak Japanese yen. It has brought another shockwave to Hong Kong,' Mr Tung said. He insisted the Government would defend the pegged exchange rate. 'We will definitely maintain the link.' Earlier, Mr Tung said the Government would step up promotion overseas to explain the need to maintain the peg, which he said was a consensus in the local and business community. 'Could we do a better job? I'm sure we can . . . do better overseas to show why we're doing it, and our determination it will be done.'