HONG KONG: Hong Kong shares closed down 1.78 percent on Thursday, a sixth consecutive loss, amid concerns over the ongoing European debt crisis and following another batch of weak manufacturing data from China.
The benchmark Hang Seng Index shed 327.59 points to 18,026.84 on turnover of HK$58.67 billion ($7.50 billion).
Global markets have been on edge since last week's European debt deal, which is considered by many not to go far enough in its attempt to address the region's two-year crisis.
And on Wednesday German Chancellor Angela Merkel warned that it would take years for the European economy to get back on track.
Adding to the sense of gloom in Hong Kong and Shanghai were preliminary figures from HSBC showing that Chinese manufacturing activity contracted for a second straight month in December as exports are hit by troubles in the Europe and the United States.
"The European summit concluded without any concrete plan to tackle the region's imminent debt problems. China isn't going to massively loosen its credit or property tightening policy," said Jackson Wong, an investment manager at Tanrich Securities.
Offshore oil producer CNOOC dropped 4.6 percent to HK$13.82 as crude prices slipped, while PetroChina fell 3.0 percent to HK$9.04.
China property developers bucked the trend and rose due to bargain hunting, with China Overseas Land up 1.2 percent to HK$13.58 and China Resources Land up 1.2% at HK$11.92.
Chinese shares closed down 2.14 percent following the manufacturing figures. The Shanghai Composite Index, which covers both A and B shares, was down 47.63 points at 2,180.90 on turnover of 47.3 billion yuan ($7.5 billion).
Chinese leaders agreed to maintain a "prudent monetary policy" and "guarantee steady growth" in 2012, state media said, citing a statement issued after the Central Economic Work Meeting closed on Wednesday.
The statement is a strong sign Beijing will be cautious in easing credit restrictions put in place in the past two years to curb inflation and surging housing prices.
Coal miners led the declines. Datong Coal plunged 7.0 percent to 12.30 yuan, while Shenhua Energy ended down 3.4 percent at 24.05 yuan.
Metals firms also dropped on a gloomy outlook for the domestic economy. Xiamen Tungsten dived 8.5 percent to 30.77 yuan and Zijin Mining lost 5.0 percent to 3.81 yuan.
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