Oct. 24 -- Hong Kong stocks fell, driving the benchmark index to its longest weekly losing streak in six years, and briefly below the 13,000 level. Financial shares led the drop on concern slowing global growth will erode corporate profits.
HSBC Holdings Plc slumped 7.9 percent after Morgan Stanley cut its share-price estimate on the stock. Cathay Pacific Airways Ltd., the city's biggest airline, dropped 8.5 percent as crude oil prices climbed yesterday while China Eastern Airlines Corp. dropped below HK for the first time since 2006.
China Cosco Holdings Co., the world's largest operator of dry-bulk ships, retreated 11.5 percent after Goldman, Sachs & Co. slashed its share-price target for the stock by 73 percent and shipping rates fell.
``At times like this, most people try to stay away from stocks -- cash is king,'' said Renault Kam, a senior portfolio manager at Atlantis Investment Management in Hong Kong, which oversees billion. ``No one has the guts to take any bets.''
The Hang Seng Index lost 967.35, or 7.03 percent, to 12,793.14 at 2:47 p.m. local time, its first drop below 13,000 since Oct. 28, 2004. The gauge extended its losses this week to 12 percent. That's the gauge's eighth straight weekly decline, its longest weekly losing streak since the eight weeks to Oct. 11, 2002.
The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, dropped 9 percent to 5,830.38.
Shares also retreated on signs that the global economic slowdown is worsening after Japan's Sony Corp. cut its earnings forecast and South Korea's growth weakened.
HSBC plunged 7.9 percent to HK$92.65, set for its worst close since July 24, 2003. Morgan Stanley cut its share-price forecast on the stock to HK$75 from HK$100.
``We question how long HSBC shares can continue to tread water in the face of falling earnings and increased pressure on capital,'' Morgan Stanley analysts led by Anil Agarwal said in a report today.
The Hang Seng Finance Index's 8.5 percent slump was the sharpest among the broader Hang Seng Index's four industry groups.
Cathay Pacific slipped 8.5 percent to HK$8.92. China Eastern retreated 11.5 percent to 92 Hong Kong cents, its first drop below HK since July 18, 2006. The nation's third-largest carrier said a plunge in its share price is ``fair,'' and reflects the slowing demand for air travel.
China Cosco slipped 12.3 percent to HK$3.50. Goldman slashed its share-price target for the stock by 73 percent to HK$4.30 because ``ship owners would be hard pressed to let spot rates fall much further,'' according to a research note.
All but one stock on the 42-member Hang Seng Index declined. October futures slipped 7.8 percent to 12,700.
The following stocks rose or fell. Stock symbols are in brackets after company names.
Hutchison Whampoa Ltd. (13 HK) lost HK$4.50, or 11 percent, to HK.80. Hong Kong billionaire Li Ka-shing's Hutchison Whampoa, with investments in telecommunications, retailing and ports, is stopping all spending they haven't committed to until next year, Citigroup Inc. wrote in a report.
Editor: canton fair