Hong Kong shares will end the year down more than 20 percent, closing 2011 around current levels, held back by the eurozone debt crisis and slowing global growth, a Reuters poll showed on Thursday.
The territory's Hang Seng Index, which is already down 22 percent this year, is expected to close 2011 at 18,000, little changed from Wednesday's close of 18,011, according to the median forecast of nine strategists polled over the last week.
The September consensus is 28 percent lower than the 25,000 view in a similar poll at the end of June and suggests a 22 percent decline for this year. That would be the first loss since 2008, when it collapsed by nearly half.
"Markets will continue to track downwards until we see some decisive action to stabilise the situation in Europe - certainly the biggest risk to global financial markets right now," said Hui Miao, Deutsche Bank's China and Hong Kong Equity Strategist. Miao added that Europe's sovereign credit crisis, a possible US recession and softer economic growth in China are all likely to dent earnings in the fourth quarter.
Poll participants see the benchmark reaching 20,000 in mid-2012 on the expectation that sovereign debt concerns in Europe would have been adequately resolved, but some analysts warn the situation could get worse.