A Pedestrian walks past an electronic board showing the Hang Seng Index of Hong Kong stocks in Hong Kong, China, Feb. 24, 2009. Hong Kong stocks drop 376.58 points to close up at 12798.52 on Tuesday.[Xinhua]

Hong Kong stocks pared huge losses but still lost 2.86 percent on Tuesday, tracking the sharp declines of Wall Street overnight.

The benchmark Hang Seng Index lost 385.81 points, or 2.93 percent, to open at 12,789.29 as market sentiment was again shattered by Wall Street, where major indices fell to their lowest level since 1997.

Short-selling investors took Wall Street woes as a good opportunity to corner those optimistic buyers, sending the index down as much as 540.26 points, or 4.1 percent, to the day's lowest 12,634.84 in the morning session.

Bargain investors returned to the market in the afternoon session on hopes of stimulus measures in the annual Budget to be delivered by Financial Secretary John Tsang on Wednesday, trimming the market's losses to 376.58 points, or 2.86 percent, to close at 12,798.52.

Turnover fell to 36.97 billion HK dollars (4.77 billion U.S. dollars) from Monday's 39.58 billion HK dollars (5.1 billion U.S. dollars).

Among 42 components of the Hang Seng Index, declining shares outnumbered advancing issues 40 to 2. Utilities company HK Electric and insurer Ping An outshone the entire market by posting gains.

Major blue-chip companies fell across the board. Market giant China Mobile, the country's largest mobile phone operator and the market's largest stock by capitalization, dropped 2.86 percent to 69.6 HK dollars, dragging down the index by 53.58 points alone.

Another market heavyweight HSBC, which accounts for the largest weighting of the index, fell 2.98 percent to 53.65 HK dollars, dampening the index by 42.21 points alone.

Hong Kong Exchange and Clearing Ltd., the market's sole operator, weakened 3.14 percent to 63.35 HK dollars.

Energy companies all fell as global oil prices slid to around 38 U.S. dollars a barrel. PetroChina, the country's largest oil producer, lost 3.17 percent to 5.71 HK dollars. Sinopec, Asia's largest oil refiner, dropped 3.21 percent to 4.22 HK dollars. CNOOC, China's largest offshore oil company, declined 3.42 percent to 6.78 HK dollars.

Hong Kong's local property companies were all weaker. Sun Hung Kai Property went down 3.85 percent to 60 HK dollars. Cheung Kong lost 2.13 percent to 64.4 HK dollars. Henderson Land slipped 1.37 percent to 25.3 HK dollars. Sino Land retreated 4.75 percent to 6.02 HK dollars. Hang Lung shrank 2.62 percent to 14.12 HK dollars. New World Development was down 1.67 percent to 7.08 HK dollars.

China Enterprise Index or H-shares, which reflect the performance of 42 companies registered on the Chinese mainland listed in Hong Kong, plunged 238.8 points, or 3.27 percent, to close at 7,068.21 as stock markets in the Chinese mainland dived more than 4 percent.

China's banks and insurance companies listed in Hong Kong were mostly lower.

ICBC, China's largest lender, moved down 3 percent to 3.24 HK dollars. Bank of China, the country's second largest bank, softened 2.79 percent to 2.09 HK dollars. China Construction Bank retreated 2.77 percent to 3.86 HK dollars. Bank of Communications skid 3.02 percent to 4.81 HK dollars. China Merchants Bank declined 3.6 percent to 11.78 HK dollars.

China Life, the country's largest insurer, receded 3.23 percent to 22.45 HK dollars.

Ping An, China's second largest insurance company, outperformed the entire market as Goldman Sachs upgraded its rating from " neutral" to "buy" and raised its target price to 42 HK dollars from previous 32.6 HK dollars. Ping An added 0.68 percent to 36.9 HK dollars. (HK$7.75 = US$1)

(Xinhua News Agency February 25, 2009)