Falls on the Tokyo stock market triggered a 2.56 per cent sell-off of Hong Kong blue chips yesterday, with investors taking profit on a month of healthy gains.
The Hang Seng Index shed 280.75 points to close at 10,659.32, with turnover at $6.44 billion.
Selling pressure increased after lunch when traders came back to find that the Tokyo stock market had fallen sharply. The Nikkei-225 Index closed 3.38 per cent lower at 15,717.92 points.
Analysts said the market had been waiting for an excuse to sell as shares had been heavily overbought during the past few months.
'It could have been much worse than it was - which suggests there was not a lot of institutional selling out there,' Credit Suisse First Boston sales trading director Jonathan Gurnsey said.
The biggest losers among the blue chips were Great Eagle, 5.78 per cent to $8.95; Hang Seng Bank, 4.12 per cent to $69.75; and Hopewell, 4.08 per cent to $3.525.
Market giant HSBC shed 2.48 per cent to close at $235.
