HSBC Holdings (HSBC)

[MWM]

HSBC hits 10-year low as Asian markets join global banking rout




20th February 2009 11:15

Shares in Europe's biggest lender, HSBC, hit their lowest point in a decade in Hong Kong on Friday (February 20th) amid negative speculation about the bank's forthcoming earnings and capital reserves.

The tumble helped to pull the benchmark Hang Seng Index down by 2.5 per cent as worldwide financial stocks were hammered by continuing fears over liquidity and concerns over institutions' exposure to a potential collapse in eastern Europe's banking system.

HSBC dropped 2.3 per cent to HK$53.80 (£4.95) per share, the lowest price since October 1998.

"The current economic down cycle is far from over, so the market is still trying to find a bottom," said Peter Lai of DBS Vickers.

The Hang Seng Index closed 324.19 points down at 12,.699.17. Reuters said the market was down 6.3 per cent over the week.

In Tokyo, the Nikkei 225 dropped 1.9 per cent as fears over an eastern European banking recession sent shockwaves through financial stocks.

The country's biggest lender, Mitsubishi UFJ Financial Group, lost 2.3 per cent, while Mizuho Financial Group plunged 4.1 per cent.

The Nikkei closed at 7,416.38, down 4.7 per cent over the week. Japan's broad-based Topix Index also closed down, hitting its lowest point since 1984 at 739.53.