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HONG KONG: Hong Kong stocks fell three percent Monday afternoon as HSBC and other lenders tumbled, with traders fretting over the financial sector despite the UBS buyout of troubled Credit Suisse.
The Hang Seng Index slipped 3.01 percent, or 586.66 points, to 18,931.93, in line with a sell-off across Asia.
The Shanghai Composite Index fell 0.23 percent, or 7.61 points, to 3,242.93, reversing early gains that came on the back of news that China had cut the amount of cash banks must keep in reserve in a bid to kickstart lending.
The Shenzhen Composite Index, on China’s second exchange, shed 0.32 percent, or 6.56 points, to 2,053.63.
In Hong Kong, market heavyweight HSBC fell more than six percent, as did Standard Chartered, while Hang Seng bank lost more than two percent.
The selling came as investors grew worried about lenders’ exposure to risky bonds related to Credit Suisse.
Hong Kong stocks finish sharply higher
“The Credit Suisse deal has left some bondholders with significant losses and investors in the region may be re-examining exposure to financial market turmoil and tail risks,” said Marvin Chen, an analyst at Bloomberg Intelligence.
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