HONG KONG---Hong Kong stocks dropped 0.32 percent Tuesday after mainland Chinese shares slumped, as dealers said a recent run-up created room for a market correction with banks among the biggest losers.
The benchmark Hang Seng Index lost 74.88 points to 23,333.69 on turnover of HK$78.03 billion (US$10.06 billion).
On the Chinese mainland, the Shanghai Composite Index dropped 3.03 percent, or 94.84 points, to 3,032.61 on turnover of 419.5 billion yuan ($68.5 billion).
The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.39 percent, or 19.68 points, to 1,392.62 on turnover of 206.2 billion yuan.
"The (Shanghai) market climbed too fast in such a short time after the November interest rate cut, which has caused some structural problems in the market," Shenyin & Wanguo Securities analyst Gui Haoming told AFP.
The market had jumped more than 20 percent since the cut to interest rates last month -- rising above the 3,000 mark on December 16 for the first time in three and a half years.
"The market did not make a complete correction when the index first barreled to the 3,000 mark following the rate cut, and it is possible it may undergo an even sharper correction this time around." Gui added.
Industrial and Commercial Bank of China lost 4.88 percent to 4.48 yuan while China Construction Bank fell 5.01 percent to 6.26 yuan.
AFP
