Subprime, 'through-train' fears see HSI shed 1,117 points
Hong Kong stocks slumped yesterday as deepening subprime worries and reports of longer than expected delays to the mainland 'through-train' investment scheme continued to spook investors.
The Hang Seng Index led a slide by markets across the region, falling 1,117.68, or 3.88 per cent, to a one-month low of 27,665.73. The H-share index dropped 1,047.17 points, or 5.91 per cent, to 16,656.91.
Mainland shares kept pace with the decline on concern that Beijing will continue to tighten the screws on lending after increasing the amount that banks are required to hold as reserves at the weekend.
The jitters steadied in European and and US trading, with London's FTSE 100 ending the day up 0.5 per cent at 6,337.9, and the Dow Industrial Average up 0.61 per cent at 13,122.08 in midday trading.
The HSI has risen 30 per cent since August, when the 'through-train' plan, allowing individual mainland investors to buy Hong Kong stocks, was mooted.
Credit Suisse chief economist Dong Tao said in a report the bank had confirmed the 'through-train' to Hong Kong would be delayed until the second quarter of next year at the earliest. The report did not identify a source of the confirmation.
