Hong Kong Stock Market Experienced Sharpest One Day Drop
- Led Asian Markets Lower

HONG KONG (XFN-ASIA) - Share prices closed sharply lower, with the key index posting its biggest one-day points drop ever, as China stocks tumbled after comments from Chinese Premier Wen Jiabao suggested that Beijing will delay further the start of direct share purchases in Hong Kong by mainland individuals.

Wen said the individual investor scheme, which Beijing had announced in August, should be implemented only after ensuring that conditions are in place to minimize its impact on China's domestic bourses and fund flows.

He also said that investors' risk awareness must be improved before they are allowed to buy overseas stocks.

The comments led to profit-taking in H-shares and red chips, which had posted sharp gains over the past two months on hopes of a boost from mainland individuals.

PetroChina also succumbed to profit-taking despite a stronger-than-expected debut of its A-shares in Shanghai.

Dealers noted that the financial sector also contributed to the market's weakness as troubles at Citigroup renewed concerns over the fallout of credit market meltdown on global financial institutions.

Citigroup CEO Charles Prince resigned in the wake of huge losses in the bank's mortgage-backed securities business. He joins Merrill Lynch's Stanley O'Neal, who also quit last week after announcing a big quarterly loss.

The Hang Seng Index closed down 1,526.02 points or 5.01 pct at 28,942.32, off a low of 28,920.30 and high of 30,356.79. Today's showing marks the index's biggest one-day points drop ever.

The index's previous biggest one-day points drop was on October 28, 1997, when it fell 1,438.31 points.

Turnover was 158.76 bln hkd.