HONG KONG, March 9 (Chinese media) -- Hong Kong-listed HSBC shares plunged 24 percent Monday in its biggest single-day drop in history, dragging the Hang Seng Index down 4.84 percent, as the global lender headed towards its deeply discounted rights issue this week.
As market heavyweight and one of world's biggest banks and financial service institutions, HSBC shares nearly doubled its daily loss during Hong Kong's closing auction session to close at 33 HK dollars, the lowest in nearly 14 years.
Coincidentally, HSBC's higher HSI weighting took effect on Monday, raising HSBC's free-float adjusted HSI weighting to 15 percent from 9.17 percent. In plain terms, based on current HSBC share price, every one HK dollar's fall in HSBC translates into roughly 39 points fall for HSI.
Hong Kong's benchmark index ended 576.94 points lower at 11,344. 58 on Monday, with HSBC alone accounting for a 409.47 points drop.
Last week, HSBC reported a 70 percent drop in 2008 net profit as bad debts rose in the U.S. consumer business. The banking giant said it will raise 17.7 billion U.S. dollars from its shareholders through a large rights issue priced at 28 HK dollars per rights share in Hong Kong.
The stock went into a tailspin, shedding approximately 42 percent during last week, wiping off 37 billion U.S. dollars off its market value.
Some analysts believed that short sellers dumped the stock on Monday on hopes the price would slide further after the bank completed the rights issue.
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