THE Hong Kong stock market was grossly over-extended and would plunge by half during the next 10 months, said Peter Everington, managing director of Regent Fund Management, yesterday. Mr Everington urged investors to reconsider their Asian portfolios and believed that Japan, South Korea and Taiwan would be the new bull markets. He said: ''I believe that Asian stock markets started to move into a new bull market in the second half of 1992 and that it will run to 1996. Hong Kong is the exception. It is grossly over-extended. Japan will be the biggest surprise because the stock market will double and corporate earnings will treble.'' Mr Everington said both the Japan and German markets were at the bottom of a trough and within 12 months the pick-up in their markets would accelerate. ''I believe that Japan is already in a bull market and has been so for the past 18 months. It is set to continue for another four or five years, at least. However, I think the Chinese economy is poised at a high inflation level and is set for contraction,'' he told the Far East Investment Conference. ''I think the 15-year miracle in China is truly that, and am fully confident. But China's economy cannot have a soft landing when the only economic lever has two positions: stop and go. ''Either it has to have a landing or a very hard landing. I am betting it will be a very hard landing. ''Within six months I would not be surprised if there was not some very serious problems for the Chinese currency markets. China's economy is set to slam into a brick wall.'' Mr Everington claims Hong Kong's stock markets have been reflecting pure hyper-inflation rather than a bull run during the past six months. He added he would not be surprised to see consumer price inflation at 20 per cent by the middle of this year.