HSI Slips Below 30,000 As Shanghai Tumbles 4%

Hong Kong stocks plunged more than 3 percent on Friday, the second hammering this week, as global markets are swept up in a wave of selling while investors fret about the impact of US interest rate tightening.

The HSI sank 3.1 percent, to close at 29,507.

On the mainland, the Shanghai Composite Index dived 4.1 percent, to 3,129 while the Shenzhen Composite Index fell 3.2 percent, to 1,679.

As volatility continued to dog equity markets, Tokyo's benchmark index plunged more than 2 percent. The Nikkei index fell 2.3 percent, to close at 21,382.

Sydney fell 0.9 percent, Singapore shed 1.7 percent and Seoul was 1.8 percent off. Wellington, Manila and Taipei were also hammered.

The sell-off followed another battering for Wall Street, where the Dow suffered its second-heaviest daily points fall on record -- the worst coming on Monday -- after key US Treasury bond yields spiked fuelling the likelihood of higher borrowing costs.

"There's some big-money players that have really leveraged to the low rates forever, and they have to unwind those trades," Doug Cote, chief market strategist at Voya Investment Management, told Bloomberg News. "They could be in full panic mode right now."

With eurozone and British borrowing rates expected to go up, the euro and pound climbed against the dollar.

The greenback edged up against the yen but was still sharply down from Thursday's levels in Asia as panicked investors sought out safety. The dollar fell to as low as 108.50 yen from almost 110 yen the day before, hit by a weak sale of US bonds, which jacked their yield back close to four-year highs. (AFP)