Both Hong Kong and Chinese stock markets joined the global market slump on Tuesday as investors headed for the exits amid persistent weakness in oil prices and worries over a hard landing in China. Hong Kong’s benchmark Hang Seng Index Tuesday dropped 478 points, or 2.5 per cent, to close at 18,860.80, the lowest level since June 2012 while. The Hang Seng Enterprises Index, which tracks mainland Chinese companies listed in Hong Kong, dropped 278 points or 3.4 per cent to 7,895.16. Among subindexes, energy and financials fell the most. The offshore oil explorer CNOOC dropped 7.15 per cent, while HSBC fell 3.4 per cent. The Shanghai Composite Index plummeted 6.42 per cent to close at 13-month new low at 2,749.79 while the Shenzhen Index was also down heavily, giving up 7.12 per cent. In Japan, the Nikkei 225 dropped 2.35 per cent, or 402 points to 16,708.90 while South Korea’s Kospi shed 1.15 per cent to 1,876. Crude oil price were negatively impacted by lingering worries over oversupply after Iraq’s output reached a record high last month. Benchmark crude oil prices fell 6 per cent overnight to end below US$30 a barrel. Investors opted for gold as a safe haven, with the yellow metal rising 0.8 per cent to US$1,105.3 per ounce on NYMEX. Christopher Cheung Wah-fung, legislator for brokers, said some fund managers cut back on stock holding and went into cash recently. “Every market seems to have some problems. The drop of oil prices have hit the US markets and many worry that this may be a sign of global economic slowdown. The European Central Bank has hinted there will be monetary easing policy, but no details has been given so far. China has seen its economic slowdown and capital outflow while the Hong Kong dollar is under pressure owing to capital outflows after the US interest rate rise,” Cheung said. Cheung however rejected the view that the current market slump is the beginning of another financial crisis. “China economy is slowing but we still have 6.5 per cent growth. The economic situation in the US and Europe are also much better than 2008, while Hong Kong’s banking system is much stronger than it was the 1998 Asian financial crisis,” he said. “Many Hong Kong stocks are now trading at 7 or 8 times of price-earnings which is very cheap and will attract investors back in later this week,” he said. Mark Konyn, group chief investment officer of AIA, said: “Volatility will continue until investors adjust to current conditions and take account of slower Chinese growth. “We do not see systemic risk in Asian economies and view this as an adjustment in growth expectations. Relatively, high quality bonds have held up well and the deflationary threat in a number of economies is likely to maintain this equilibrium,” Konyn said. Brett McGonegal, co-chief executive of Reorient Group, said the sell off Tuesday was “a bottoming process” in effect. “Sentiment is weak and fragile and these situations breed volatility, speculation and momentum. I think these characteristics signal emotional capitulation and represent opportunity,” McGonegal said. “I don’t believe that today in anyway resembles the situation in 2008 as leverage has been largely taken out of the developed markets. Risks are certainly present in high yield and emerging market debt but those don’t have the ability to ignite a 2008 type crisis,” McGonegal said. Bruno Lee, head of wealth and asset management of Asia of Manulife Asset Management, said investor sentiment towards China is overly negative. “Mid-cycle asset price corrections do not usually pose a big threat to macro economies,” Lee said, adding that he believe global growth will remain on track for a 3 per cent expansion this year. Japer Lo Cho-yan, director of Tung Shing Futures, said investors were now looking to the US Federal Reserve meet on Wednesday.