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Friday, June 24, 2016, 17:39

Stocks plunge over Britain referendum

By Reuters/chinadailyasia.com

Stocks plunge over Britain referendum
A woman walks out of a branch of HSBC bank in Hong Kong as an electronic board shows declines in all the 10 most active stocks for the day on June 24, 2016. (Edmond Tang / China Daily)

Hong Kong stocks tumbled on Friday, joining the global market rout after Britain voted to leave the European Union.

But the mid-session panic-selling triggered by the Brexit vote also attracted bargain hunting, which in the afternoon helped the market recover much of its losses in heavy trading.

The SAR's Financial Secretary John Tsang said the "Brexit" has brought market volatility but the currency exchange rate in Hong Kong has been stable during the day.

He added that Hong Kong has a robust economy and strong banking sector, and that the government has confidence, experience, determination and the capability to tackle challenges ahead.

Earlier in the day, the Chief Executive of the Hong Kong Monetary Authority, Norman Chan, warned that the vote result will lead to great uncertainty and continued market volatility. But he said the long-term impact of the Brexit remained to be seen.

At the close, the benchmark Hang Seng Index was down 2.9 percent, to 20,259.13, while the China Enterprises Index also had lost 2.9 percent, to 8,530.10 points.

At one point, both indexes had fallen more 5 percent.

For the week, the HSI rose 0.4 percent, while HSCE was up 0.5 percent.

Alex Wong, Hong Kong-based director at Ample Finance Group, said the market overreacted initially, but then gained some composure.

"After over-reaction, investors realized that Brexit won't have an immediate huge impact... and won't suddenly cause a financial crisis," he said, adding that next investors need to watch reactions in the United States.

Shares fell across the board in Hong Kong, led by financial and energy stocks.

British lender HSBC Holdings, at one point down 12.4 percent, ended the day off 6.6 percent, at its lowest close since June 16. An index tracking Hong Kong-listed financial stocks dropped 3.6 percent.

Stocks plunge over Britain referendum
A pedestrian walks past a bank display showing the Hang Seng Index closing figures in Hong Kong on June 24, 2016, following the results of the UK Brexit referendum. (ANTHONY WALLACE / AFP)

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