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[HONG KONG] Hong Kong stocks tumbled 3 per cent to a two-year low on Tuesday as growing fears of a sharp slowdown in the world economy sparked heavy selling, particularly in energy and commodity related shares.
The benchmark Hang Seng index fell 3.0 per cent to 20,556.60 points, its lowest close since July, 2013.
The China Enterprises Index, which tracks Chinese companies listed in Hong Kong, also lost 3.0 percent, to 9,230.50. "Investors are worried about a sharp slowdown in China ... but the biggest risk is a global recession, not just a China issue," said Steven Leung, a director at UOB Kay Hian in Hong Kong. "If you look at Japan ... its economy is in bad shape. And the economic situation is not good in Europe, either."
The bearish view was echoed by the Hong Kong Monetary Authority, which warned in its latest monetary and financial stability report that "concerns of a slowdown in the Mainland economy and uncertainties over US monetary normalisation will continue to cast a shadow over" Hong Kong stocks for the rest of the year.
All major sectors in Hong Kong fell, with the biggest decline seen in energy shares.
Hong Kong-listed Chinese oil giants, including Sinopec , PetroChina and CNOOC all tumbled over 6 per cent.
Commodity-related shares were also among the worst casualties on worries that a cooling economy would damp demand for metals such as copper, steel and iron.