HSI Tumbles As HSBC, StanChart Fall Heavily

Hong Kong shares fell on Monday, dragged by financials after reports said HSBC and Standard Chartered were among banks moving allegedly illicit funds over the past two decades and as Sino-US tensions hit index heavyweight Tencent.

The Hang Seng Index tumbled 2.1 percent, to 23,950.

Shares of HSBC touched 25-year lows and finished down 5.33 percent, and Standard Chartered lost 6.18 percent.

The two banks were among several named in the report these institutions moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the cash.

HSBC was under pressure after the Global Times, a state-run English tabloid on the mainland, reported the bank could be one of the first firms to be named on Beijing's "unreliable entity list" as part of a tit-for-tat stand-off with several Western countries.

"The big banks ... are quite a meaningful weight in the index, and that the banks are going to be under such scrutiny (after the reports) is going be a big distraction for investors in this part of the world," said Jim McCafferty, a senior researcher at Nomura in Hong Kong.

On the mainland, the Shanghai Composite Index slipped 0.6 percent, to 3,316 while the Shenzhen Composite Index dropped 0.5 percent, to 2,208.

Sydney, Seoul, Taipei, Wellington and Jakarta were also well down, with smaller losses in Singapore, though Manila, Mumbai and Bangkok were marginally higher. (Reuters, AFP)