Hong Kong stocks went down 92.98 points, or 0.65 percent, to close at 14,235.5 on Tuesday, on declines of banks and property developers on concerns of bleak outlook for the sectors.
Turnover totaled 26.38 billion HK dollars (3.4 billion U.S. dollars), the year's second-lowest level after Monday's 21.95 billion.
Some analysts said they were still optimistic the index will benefit from rallies in regional bourses on window dressing to trend higher Wednesday, the last trading day of the year.
"The current sentiment is fine, which coincides with our optimism in the remaining days of the year and even earlier next year," ICEA Securities Asia said in a research note.
However, Taifook Research said the low market volume in the local market suggests any year-end rally may not be sustainable. " While the low interest rates limit potential market downside, a sustained rally looks unlikely to extend much beyond the new year as investors begin to focus on the coming reporting season and the ensuing earnings prospects of 2009," it said in a research note.
Mainland's two largest banks by assets dropped as expectations of narrowing net interest margins continued to weigh on their performances, said YK Chan, a fund manager with Phillip Capital Management.
Industrial and Commercial Bank of China was 1.5 percent lower at 4.08 HK dollars and China Construction Bank fell 1.9 percent to 4.17 HK dollars.
Developers mostly fell as property transactions are expected to drop as Hong Kong has fallen into recession, analysts said.
Henderson Land fell 3.4 percent to 28.10 HK dollars, Hang Lung Property was 0.6 percent lower at 17.22 HK dollars and Sino Land dropped 3.7 percent to 7.80 HK dollars. (1 U.S. dollar = 7.742 HK dollars)
(Xinhua News Agency December 30, 2008)
