Hong Kong stocks plunge 3.14 percent

Special Report:Global Financial Crisis

HONG KONG, Feb. 2 (Chinese media) -- Hong Kong stocks plunged 416.72 points, or 3.14 percent, to close at 12,861.49 on Monday, on Wall Street's decline Friday due to concerns on worsening economy.

Turnover shrank to 35.69 billion HK dollars (4.6 billion U.S. dollars) from 44.10 billion HK dollars on Friday.

Dealers said that lack of economic stimulus measures by central authorities of China over the Lunar New Year holiday also disappointed investors, adding that the market is likely to decline further in the near term because of continuing concerns about the global economic downturn.

Heavyweight HSBC led the decline of the benchmark Hang Seng index on persistent worries it will need to raise more funds and cut its dividend payments. It fell 3.8 percent to 58.5 HK dollars, contributing 58.61 points to the Hang Seng Index's fall.

Chinese property company China Overseas fell 5 percent to 9. 86HK dollars on profit-taking. The developer had risen 8.1 percent in the last three sessions.

Tracking the broad market, heavyweight China Mobile dropped 2.8percent to 68.55 HK dollars and China Construction Bank ended 2.6 percent lower at 3.75 HK dollars.

Phillip Asset Management strategist Y.K. Chan said Monday's low turnover showed selling pressure was not very heavy, but that there was also a lack of bargain-hunting interest.

ICEA Research said it "still sees a chance" for the Hang Seng Index to rebound and test 14,000, provided the central authorities announces favorable policies such as interest rate cuts and a big reduction in banks' reserve ratio in coming months. (One U.S. dollar = 7. 7575 U.S. dollars)