Hong Kong's main stock index plummeted as much as 8.5 percent on Wednesday as a sell-off in mainland Chinese shares accelerated despite new measures to support the market.
The China rout also battered investor sentiment elsewhere in Asia, with other major markets finishing sharply lower.
Hong Kong's Hang Seng tumbled in the last hour of trading, a victim of the turmoil in mainland Chinese markets, where stocks have been sliding for three weeks despite increasingly desperate measures by authorities to stem the decline. The Hong Kong index trimmed its losses in the final minutes of trading to close 5.9 percent lower at 23,516.56.
The Shanghai Composite ended nearly 6 percent lower at 3,507.19 despite the latest slew of official measures aimed at supporting the stock market. Measures unveiled Wednesday included the government ordering state-owned companies to buy shares. Beijing also hiked the amount of equities insurance companies can hold and promised more credit to finance trading.
In an unusual tactic to stem the losses, more than 1,000 Chinese companies have had their shares suspended from trading or are applying for such permission, according to a report in the newspaper China Business News. That would be almost 36 percent of the total of 2,802 companies traded in Shanghai and Shenzhen.
"Everyone has come back to reality. The so-called bull market is over for now," said Jackson Wong, an associate director at United Simsen Securities Ltd.
He said the Hong Kong plunge may have been exacerbated by mainland Chinese panic selling their holdings in Hong Kong because their shares on mainland markets were frozen.
The Shanghai benchmark is down more than 30 percent since peaking June 12 after a sizzling yearlong rally.
Millions of novice investors piled into the Chinese market when it was at its most frothy. Some made big profits but the slump has left many with shares worth less than they paid and hoping for a rebound so they can sell.
Among other Asian markets, Japan's Nikkei 225 fell 3.1 percent to 19,737.64 and South Korea's Kospi lost 1.2 percent to 2,106.21. Australia's S&P/ASX 200 shed 2 percent to 5,469.50.
Elsewhere, hopes for a resolution to Greece's crisis rose after it was confirmed that the country submitted an application for a new three-year loan and said it would have a plan of reforms in coming days.
Frustrated European leaders fearing for the future of their common currency gave the Greek prime minister until Thursday to detail such a plan. They will convene for a final summit on Sunday.
Indebted Greece needs a financial lifeline from its European creditors who have been pressing for more austerity in exchange for bailout funds. Without that it's expected to see its banks collapse, paving the way for its exit from the euro currency.
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