HK index drops on falling oil prices

Hong Kong stocks ended lower Wednesday as declining oil prices dragged down resources and commodities shares.

The blue chip Hang Seng Index shed 457.4 points, or 2.17 percent, to close at 20,585.06.

Analysts said falling oil prices reflected a weakening world economy that would slow global demand for raw materials. Oil prices dropped as low as $107.32 a barrel late afternoon in Asia.

Ernie Hon, a strategist at ICEA Securities, said he expected the Hong Kong market remain bearish in the near term as investors avoid stocks and turn instead to more stable investment such as bonds.

"We have to wait until the U.S. recovers before the Hong Kong market can rebound," Hon said.

Among the worst hit was upstream oil producer CNOOC Ltd., which lost 6 percent to HK$10.7. PetroChina slid 3.2 percent to HK$9.63.

China's coal producer Aluminum Corp. of China, or Chalco, also tumbled 6.38 percent to HK$6.46.

Bucking the downward trend, airliners gained on declining oil prices, with Cathay Pacific adding 0.5 percent to HK$14.74.

Major juicemaker China Huiyuan Juice Group Ltd. also soared 164 percent to HK$10.94 after the world's biggest beverage company Coca-Cola Co. offered to buy the Beijing-based juice producer at HK$19.6 billion (around US$2.51 billion).

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Stock Exchange of Hong Kong: http://www.hkex.com.hk