THE Hong Kong stock exchange is bracing for the opening of trading tomorrow as investors scramble to offload shares after the biggest one-day fall in three US indices on Friday.
Analysts forecast panic selling could push the Hang Seng Index below 15,500 points if investors follow Taiwan, the only market to trade yesterday. The Taipei index plunged 5.4 per cent.
Kenny Tang, associate director of research at Tung Tai Securities, said: 'The Hong Kong market is worried about the prospect of another United States interest rate rise, and sentiment will weaken now the Nasdaq has dropped below the critical 3,500 level.' People should expect big markdowns and panic selling tomorrow, said Howard Gorges, vice-president of South China Brokerage, warning there could be worse to come.
'This may not be the bottom yet, though we have seen a correction here already.' Friday saw record-breaking point drops on the three US indices, with the Dow Jones Industrial Average down 617.78 points, or 5.66 per cent, to 10,305.77, as financial stocks lost all their recent gains. This leaves the Dow down 10.4 per cent for the year so far.
The technology-dominated Nasdaq composite index plunged to finish 9.67 per cent, or 355.49 points, lower at 3,321.29. This took it back to November levels, leaving the index down 25 per cent, or 1,220 points, on the week and 34.2 per cent off its March 10 peak of 5,048.62.
The broader Standard & Poor's 500 index fell 83.20, points or 5.78 per cent, to end at 1,357.31.
The main reason for Wall Street's plunge appears to be the rise in US consumer prices last month, raising fears of increasing inflation, which puts pressure on the Federal Reserve to push up interest rates to dampen growth.
