YESTERDAY'S sharp drop in the Hang Seng Index was led by the market's four largest-capitalised counters - HSBC Holdings, Hang Seng Bank, Hongkong Telecom and Sun Hung Kai Properties - which between them lost 60 points or 35.9 per cent of the 166.94-point total. HSBC Holdings fell $1.50 to $72.50, Hang Seng Bank $1.50 to $57.50, Hongkong Telecom 20 cents to $11.20 and Sun Hung Kai Properties 75 cents to $38.25. Even so, HSBC Holdings and Hang Seng Bank are still trading higher than they were on May 21, while Hongkong Telecom is at the same level. SHKP is down 75 cents. With investors anxious to abandon stocks, turnover hit $5.15 billion. June index futures fell 140 points to 7,215. The renminbi's depreciation rocked the index right after trading began, with 112.04 points wiped off by 10.15 am. The free-fall stopped suddenly, the index apparently meeting strong support at 7,200. However, a recovery to 7,237.32 was followed by renewed weakness, and the index fell to 7,178.01 at lunchtime. In the afternoon, the index touched the day's low of 7,138.71 before a modest rebound just before the close as opportunistic buyers moved in. Hutchison Whampoa, the most heavily-traded stock with turnover of $281.3 million, fell 50 cents to $20.90, while Cheung Kong retreated by 70 cents to $27.30. Wharf Holdings, which dropped on Wednesday in part because the stock went ex-dividend, lost 40 cents to $20.10. Dairy Farm was the only index stock unscathed, edging up 10 cents to $12.60. Retail stocks with China-exposure, investor favourites until about six weeks ago, were all dealt further blows with sharp price drops. Goldlion, which generates 60 to 70 per cent of its sales in China, was hammered, the stock tumbling $1.05 or 11.7 per cent to $7.90. Before the depreciation, Goldlion, which plans to open 16 stores with mainland partners this year, said it had dealt with previous weaknesses in the renminbi by raising prices. Le Saunda dropped 18 cents or 8.5 per cent to $1.92, Fairwood fell 25 cents to $3.425 and Giordano lost 45 cents to $5.50. A recent research report by S.G. Warburg analyst Allan Ng suggests sellers of Le Saunda may have over-reacted: it produces all the footwear it sells in China and nearly half of what it sells outside China at its factory in Guangdong, so the renminbi's depreciation will have no effect. Gold Peak Industries, identified by Mr Ng as benefiting from the renminbi's depreciation, fell 10 cents to $3.125. Mr Ng said Gold Peak, which makes batteries and car audio equipment, would benefit because it had 50 to 60 per cent of its production capacity in China but only 12 to 13 per cent of its sales. For the second consecutive day the property sub-index fell furthest, tumbling 308.29 points to 11,435.73, as fears about reduced mainland liquidity hit home. In addition to Sun Hung Kai's decline, Hongkong Land fell 40 cents to $15.70 while Hysan Development dropped 10 cents to $16.20. Among the second-and third-line stocks affected was Tian An China Investments, the first Hongkong-based property developer to focus solely on China, which lost 30 cents or 11.5 per cent to $2.30. Uniworld Holdings, the subject of rampant mainland takeover speculation earlier this week, dropped one cent or 10.8 per cent to 7.4 cents. M.C. Packaging, which exports aluminum cans to China, lost 32.5 cents or 8.2 per cent to $3.625 while agro-industrial concern C.P. Pokphand was off 20 cents or 8.9 per cent to $2.025. Hongkong Worsted Mill continued to tumble after hitting a record high last week, falling $1.14 or 15.7 per cent to $6.10. FE Holdings International posted the day's best gain, climbing 27.5 cents or 12 per cent to $2.55. Mandarin Dragon was up 30 cents or 5.9 per cent to $5.35.