Hong Kong's bull run ends with plunge amid worries about China

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The Independent Online
HONG KONG (Bloomberg) - Stock prices plunged yesterday as investors rushed to lock in some of the gains made in the market's bull run, amid growing concern about possible social instability in China.

The Hang Seng index closed down 793.43 points, or 6.52 per cent - its second biggest decline in history - at 11,374.50, on turnover of HKdollars 13.07bn (pounds 1.16bn).

'Essentially, people are panicking and heading for the exit,' said Barry Yates, director at Vickers Ballas, Hong Kong. 'The Chinese Lunar New Year bull run is already over.'

Mr Yates said that articles in the official Chinese press openly talking about possible social disturbances indicated that the Chinese leadership was extremely worried.

But some brokers said that talk of social instability in China was being used as an excuse by investors to reap profits.

'Almost 7 per cent in one day is a bit worrying but really it is only a healthy correction,' said Chris Malpass, sales director at Peregrine Brokerage, who predicted the market would slip to around 11,000 before bouncing back.

(Photograph omitted)

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