HSI Loses 2 Percent As Crisis Fears Deepen

Hong Kong stocks tumbled on Tuesday as protests that have jolted the city for more than two months fuel political and economic uncertainty, with China's growing frustration leading to worries it will take a tougher line with the standoff.

The increasingly violent unrest in the key financial hub comes as world markets are hit by fears about the global economy and dimming hopes for trade talks between China and the United States.

The Hang Seng Index ended the day 543 points lower at 25,281 – the lowest close in more than seven months.

Market turnover was more than 84.2 billion dollars.

Leading the fall was Galaxy Entertainment after the Macau casino operator posted a 7 percent drop in first-half profit. Galaxy shares plunged 5.8 percent.

Stocks of Sands China also dropped 3.5 percent. MGM China slumped 4 percent.

Shares of Cathay Pacific plunged to a new 10-year low after another day of flight disruption at the airport. Cathay shares lost another 2.6 percent to $9.55.

The MTR Corporation also saw its shares retreat almost 4 percent to the lowest close since March.

"It looks like the situation will get worse," Airy Lau, investment director at Fair Capital Management. "Together with the higher global recession risk from US-China friction, the Hang Seng Index is likely to have 5-10 percent more downside."

Across the border, shares traded lower after data showed banks extended fewer-than-expected new loans in July. The blue-chip CSI300 index fell 0.9 percent. And the Shanghai Composite Index slipped 0.6 percent.

Markets in Japan and Taiwan each dropped more than 1 percent. South Korea declined 0.9 percent. And Singapore lost just over 1 percent. (additional reporting by AFP)