World Markets: Hong Kong

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IN THIN TRADING, Hong Kong's benchmark Hang Seng index dropped 1 per cent to close at 10,121, with investors sitting on the sidelines ahead of the New Year holiday.

HSBC, the territory's largest company by market capitalisation, fell nearly 1 per cent, as investors do not expect the proposed acquisition of the debt-laden Korea First Bank to be profitable for a number of years. Hong Kong Telecommunications, the city's largest telephone company, fell 2.5 per cent, after a newspaper article suggested that the company plans to cut international call rates.