Hong Kong stocks face a rough ride today as investors grapple with the fallout from Wall Street and the loss of iconic names that just last year appeared indestructible.
'The short term will be pretty much dominated by fear and uncertainty,' said Ben Kwong Man-bun, chief operating officer at KGI Securities. 'That means the market will face more downward pressure.'
Regional markets got a head start on the sell-off yesterday as Taiwan fell 4.09 per cent, the Philippines 4.16 per cent and Malaysia 1.19 per cent. Japan, South Korea, Hong Kong and the mainland were all shut for public holidays and will reopen today.
Even though the mainland financial system is expected to be less affected by the turmoil on Wall Street, market observers still expected the news to have a ripple effect there.
'The sentiment is so poor already,' said Paul Pong, head of the Pegasus Fund. 'So any bad news, even from the outside, will hurt the A-share market because the investors are too bearish and have not had much experience with a bear market before.'
The Shanghai Composite Index may test the 2,000 level this week and could do it as soon as today, Mr Pong said. The benchmark slumped 5.57 per cent to 2,079.67 last week for its seventh straight weekly decline.