UpdateOccupy Central protests keep pummelling HK stocks after holiday break

Hong Kong stocks slid on Friday morning after a two-day holiday break as the Occupy Central protests kept the market on the defensive while stocks in the rest of Asia rose.

The Hang Seng Index dropped 198.91 points or by 0.87 per cent to 22,734.07 points in the morning session. The benchmark had fallen a combined 3.2 per cent on Monday and Tuesday in the wake of pro-democracy protests that erupted over the weekend.

Volatility continued to increase to a seven-month high over worries the student blockade in Hong Kong’s streets could drag on far longer than expected.

The index was also tracking the performances of the US markets, which fell for three consecutive days ahead of the monthly US jobs data due out later on Friday. In addition, moves by Beijing to limit the amount of debt local governments can take on and bar them from new borrowings through their financing units fed into punters’ worries after the holiday.

Despite the glum mood in Hong Kong, some investors feel the sell-off has uncovered some buying opportunities. Mark Konyn, chief executive of Cathay Conning Asset Management, said the company would look to add to its Hong Kong equity portfolio, targeting those stocks with reduced valuations that have good earnings prospects. Market fundamentals remained strong, he said.

The financial sector took the hardest hit this morning. Heavyweight HSBC lost 1.89 per cent to trade at HK$78.05. Of the Big Four mainland banks, China Construction Bank dropped the most, shedding 1.1 per cent to HK$5.38.