Hong Kong bourse falls sharply on opening

The fall at Hong Kong bourse came amid overnight selloffs on bourses around the world. In Japan, the Nikkei Index fell by more than 3.7% within minutes of the market opening.

The selloff was sparked by a fall on China's main stock market, causing a domino effect through markets elsewhere in the world. On Wall Street on Tuesday, markets shed more than 3%, Europe's markets fell 3% and Japan lost 0.5%.

Slight recovery

The Australian stock market made a slight recovery by noon on Wednesday after plunging more than 3% at the opening, mirroring the global reaction to the massive selloffs in China and the United States.

At 1212 AEDT, the benchmark S&P/ASX200 index had been stripped of 2.45% of its value, or 148.1 points, to 5845.7, and the all ordinaries had given up 2.5%, or 150.4 points, to 5827.2.

On the Sydney Futures Exchange, the March share price index contract was down 158 points to 5840 on a volume of 28,536 contracts.

Harvey Norman was caught up in the big fall despite posting a 37% lift in first-half net profit of $180.5 million on Wednesday. The furniture and consumer electronics retailer was down 12 cents to $A4.29 by 1225 AEDT.

The banking sector reflected the weakness in the market with the big four losing ground: National Australia Bank down 68c to $A40, Commonwealth Bank down 62c to $A50.04, ANZ down 38c to $A29.34 and Westpac down 45c at $A25.75.

At 1240 AEDT, the spot price of gold in Sydney was $US667.40 per fine ounce, down $US18.25 from Tuesday's close.

Among the gold stocks, Newcrest relinquished 98c to $A22.89. Rival miner Newmont slid 30c to $A5.64 and Lihir Gold was 10c poorer at $A3.36.

NZ dip eases to 2%

The New Zealand stock market has followed its overseas counterparts, falling in trading on Wednesday morning after jitters on China's main stock market.

The NZX is now down 2%, improving slightly on Wednesday morning's opening.

The benchmark NZX 50 index was trading about 3% lower as it reacted to a global selloff, sparked by investors' concerns in China that the government there may pass rules to limit demand for stocks. The index initially fell more than 1%, with all stocks bearing the brunt. At 11.45am, it was down almost 3%, or 115 points, to 3984.

In New York the Dow Jones Index fell by more than 400 points, its heaviest one-day decline since the terrorist attacks of September 11, in 2001. The index closed down by more than 3%.

Euopean exchanges were also down by about 3%. The falls have wiped billions of dollars in value from shares.

The New Zealand dollar is feeling the pressure and fell below US70 cents, after trading above US71c on Tuesday. However, At 3.28pm it was buying US70.29c.

Shanghai triggers global drop

The Chinese stock market has suffered its worst day of trading in 10 years after a large wave of share selling by leading investors.

The benchmark Shanghai Composite Index fell by 8.8% on Tuesday - its worst daily performance since February 1997. Shares tumbled 268.81 points to 2771.791. The index reached record highs this week, closing above the 3000 mark for the first time on Monday.

Few companies were immune to the wave of selling, with banking and metals stocks particularly weak. Industrial and Commercial Bank of China, China's largest bank, slumped 8%; steel producer Baoshan dropped by 10%.

The fall came amid rumours of a crackdown on illegal share offerings and trading as well as fears about accelerating inflation.

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