HK shares close down 3.4pc

HONG KONG: Hong Kong shares tumbled for a third straight session on Tuesday, as weakness in mainland oil producers and property names dragged the Hang Seng Index to a 2-1/2 year low ahead of a public holiday on Wednesday.

The Hang Seng Index closed down 3.4 percent at 16,250.3 points, while the China Enterprise Index ended down 3.6 percent at 8,102.6 points.

Financial markets in China are shut this week for an extended National Day holiday.

HIGHLIGHTS:

Losses topping 36 percent in 2011 to date have pushed multiples for the China Enterprise Index of the top Chinese firms listed in Hong Kong, otherwise known as the H-share index, to its lowest since the 2008 financial crisis. It is currently trading at 6.8 times its 12-month forward earnings, according to Thomson Reuters I/B/E/S data. This is also its second-lowest since 2003.

A small short squeeze provided respite for some Chinese property names. China Overseas Land & Investment , which lost 15 percent over three sessions before Tuesday, gained 3 percent. Its Hong Kong peers were top percentage losers among Hang Seng components, with Hang Lung Properties bleeding almost 7 percent.

Shares of CNOOC Ltd , seen most sensitive to movements in oil prices among the three Chinese oil companies, slumped almost 7 percent, partly tracking lower global oil prices. Losses of over 28 percent in the third quarter have pushed multiples to its lowest since the 2008 financial crisis. CNOOC Ltd is now trading at 6.5 times forward 12-month earnings, compared to 10.7 times median.