The New Nation - Internet Edition

Reuters, Hong Kong

Hong Kong shares fell 1.6 percent in dismal volumes on Monday, led by global lender HSBC, as the U.S. government's lifeline to global banking giant Citigroup failed to ignite buying in financial counters.

Mainboard turnover languished at HK$35 billion ($4.5 billion), its lowest in 20 months, excluding half days and typhoon-interrupted sessions, as investors kept away from the market amid predictions it will soon slip below its October low. Monday's turnover is slightly over half the average daily turnover in the third quarter.

"Two months ago, something like a Citigroup bailout would have set fire to the market but now people have understood that you just sell into strength," said Benjamin Collett, head of hedge fund sales with Daiwa SMBC.

Europe's largest bank, HSBC Holdings, pared losses to 3 percent at HK$74.75 after it opened at a seven-year low of HK$73. HSBC arm Hang Seng Bank dropped 2.4 percent while another local lender, BOC Hong Kong, shed 7 percent.