PRICES continued their downward trend yesterday on the lowest turnover since July 11 ahead of the uncertainties in the global market and growing tensions over a potential military confrontation in the Middle East. The Hang Seng Index slid 36.48 points, or 0.39 per cent, to 9,248.40, which meant the marginal gain on Friday had spluttered into nothing. Shares worth only $2.18 billion changed hands, the lowest trading volume since $2.31 billion on October 3. Sentiment was apparently dampened by warnings over Iraqi military movements along the Iraq-Kuwait frontier and prolonged fears over an interest rates rise in the United States, as no enthusiastic breakthrough was seen in the domestic market. Blue chips kept their strength, making up 58.15 per cent of total turnover, with a mixed performance among the index stocks. Small market counters took 38.78 per cent, while H shares accounted for 3.05 per cent. The new crisis in the Gulf fuelled selling, although most investors queried if Iraq would really break into Kuwait at all costs, said brokers. 'The market lacks incentives in the absence of positive news within the territory,' said one analyst. 'Trading is still pending the release of some inflation-related statistics, such as the US consumer price index and the producer price index. Investors became very nervous even to little changes in the global environment,' he said. However, compared with the downward pressure on other regional markets, most of which lost more than one per cent, Hong Kong was relatively steady in its performance, the analyst said. By sector, property stocks remained the worst-hit casualties in bearish trading. The sub-index under-performed the market throughout the day, losing a total of 144.37 points, or 0.87 per cent, to 16,374.24. Sun Hung Kai Properties was the biggest loser among the index stocks from that sector, in spite of a special cash bonus of 38 cents a share declared last Friday in its final results. Sun Hung Kai's price closed at $54.75, dropping 75 cents, or 1.35 per cent, on turnover of $78.32 million. Smith New Court analyst Walter Chan said: 'It doesn't matter whether money was distributed in a form of special bonus. 'Instead, investors are interested in the total dividend, which just fell in line with expectation.' In view of a higher-than-expected oversubscription of Cheung Kong's Bayshore Towers at Ma On Shan, Mr Chan said no dramatic impact was expected. 'It would only be significant if the property was priced at the previous $4,900 a square foot and the same reaction resulted.' Overall, brokers admitted that fears of the US interest rates rise would still be uppermost in investors' mind as trading was mainly being dictated by fund flows. However, opinion was divided on whether there would be enough support in the market to test the 9,000-point level. Some brokers said the Sino-British row over the Container Terminal 9 (CT9) would continue the downward trend, while some said stocks had already been over-sold and a rebound would follow. Jardine Matheson, at the centre of the CT9 argument, was trimmed 50 cents to $62. However, dealers said price movements on a thin trading volume posted little meaning. Swire Pacific A was the worst performing index stock, losing $2 to $56.25 when a brokerage in the territory dumped its shares.