Hong Kong benchmark heads for correction as China shares tumble

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SHANGHAI (Feb 9): Hong Kong’s Hang Seng Index resumed its slide and the H-share gauge extended losses, with both poised to fall more than 10% from their January peaks.

Nearly all members of the Hang Seng Index fell, led by the best performer over the past 12 months, Country Garden Holdings Co, which has tumbled 22% this week. Hong Kong’s benchmark index was down 3.1% at 29,508.89 as of 9:58am, heading for a weekly loss of 9.5%, its worst since 2008. The Hang Seng China Enterprises Index fell for a fifth day, losing 3.9% as its weekly loss extended to 12%.

Mainland markets were also hit following a rout in US equities overnight. Large caps continued to feel the brunt, with the CSI 300 Index dropping 3.3%, heading for a four-day loss of 9.2%. Even the ChiNext Index of small caps and tech stocks, which proved relatively immune with gains on Wednesday and Thursday, couldn’t escape. It was down 1.3%.

“We are still in the depth of market volatility as sentiment was hurt by the double whammy of US market turmoil and deleveraging efforts at home,” said Wu Kan, a Shanghai-based fund manager at Shanshan Finance Co. “Risk appetite has dropped sharply and I don’t think the situation will get any better before the Chinese New Year holiday.”