HK's Hang Seng Index slides below 10,000 by midday
July 24, 2002 01:06:00 AM ET
(Updates with midday close)
HONG KONG, July 24 (Reuters) - Hong Kong's key share index ended the Wednesday morning session at a fresh nine-month low as telecoms issues were beaten down after further earnings worries over the sector in the United States.
"The dust needs to settle before one goes trying to catch falling knives," said Lena Tan, director of research at Fortis Investment Management, which oversees about US$1 billion in Asia excluding Japan.
"What may look cheap today may not be so cheap after their earnings get revised down, so we need to wait for the results season to be over before we can digest the situation," Tan said.
The Hang Seng Index was down 3.46 percent at 9,956.77 at the midday break, its lowest point since late October, as it fell back below the 10,000 psychological support level, after holding above it for most of the morning session.
The index had dipped briefly below 10,000 on Tuesday.
Global stocks, especially telecom shares, have been battered in recent days in the wake of the WorldCom accounting scandal and the firms subsequent decision to file for bankruptcy protection, the largest ever filing in U.S. history, earlier this week.
Leading the way down were shares of China Mobile , the mainland's number one cellular operator, and its smaller rival China Unicom , which dropped 5.02 percent and 6.09 percent respectively, reacting to renewed selling in the telecoms sector in the U.S. on Tuesday.
China Unicom's fall to HK$5.40 represented a new low since its market debut in 2000, while China Mobile shares at HK$20.80 were at their lowest level since September last year.
On Wall Street, the blue chip Dow Jones industrial average fell 1.06 percent while the technology-laced Nasdaq composite index slumped 4.18 percent, as telecoms giants like AT&T Corp (T) and Lucent Technologies (LU) were hit after announcing weak results, while SBC Communications (SBC) said it expects full year earnings to fall short of Wall Street expectations.
Shares of China Mobile, the Hong Kong bourse's second biggest stock, were also sold down on market rumours that financial services company China Everbright was selling its stake in the company.
However, China Everbright chief financial officer Louis Lau told Reuters by telephone that the company has not sold any China Mobile shares but it will consider doing so if it needs the money for investment. REUTERS
