HONG KONG (Nikkei Markets) -- Hong Kong stocks suffered their steepest drop in 13 months on Wednesday, led by an extended sell-off in some of the year's best gainers.
The Hang Seng Index slumped 2.1% to 28,224.80, with 48 of its 51 constituents ending in the red in heavy trade. More than 162 billion Hong Kong dollars ($20.8 billion) changed hands on the main board. Technology and financial companies that have rallied the most this year contributed the most to the day's losses.
Geely Automobile Holdings tumbled 8.4% and Sunny Optical Technology Group plunged 12.5%. Both are still trading at more than three times higher than at the end of last year. Sunny Optical, which became a member of the Hang Seng Index on Monday, has lost more than 16% so far this week.
Heavyweights Tencent Holdings and Ping An Insurance Group slid 2.7% and 4.2%, respectively, continuing to lose ground after they hit record-highs last month. HSBC Holdings and insurer AIA Group gave up 1.6% and 1.3%, respectively, following weak cues from Wall Street.
The Hang Seng China Enterprises Index of large mainland companies listed in the city slumped 2.8%. All 40 members ended lower.
The sell-off was a line with a recent pullback in global equity markets and speculation that Chinese authorities would maintain a tight policy stance to reduce debt. Investors also wanted to take their profit after a strong performance in the first 11 months of the year, analysts said.
"Global fund managers are taking gains before Christmas holidays and the year end, after reaping so much profit in the first 11 months," said Kevin Leung, director for global investment strategy at Haitong International Securities. "Probably the money will come back in January 2018 and cause another rally in the Hong Kong market. I am a little surprised that state-linked funds are not intervening in the A-share market right now."
The Shanghai Composite Index dipped 0.3% on Wednesday, while the CSI 300 index of large Shanghai- and Shenzhen-listed companies gave up 0.6%. The yuan traded onshore was little changed at 6.6138 against the U.S. dollar.
The Nikkei Asia300 Index of regional companies outside Japan dropped 1.3%.
Guangzhou Automobile Group dropped 9% in strong volume amid broad market losses. The automaker late on Tuesday reported a 3.5% increase in total vehicle sales for November.
Beijing Capital Land lost 1.6% even as its November contracted sales rose 79.2% from a year ago, while Gemdale Properties and Investment gave up 3% despite a 30% increase in its monthly contracted sales.
Red Star Macalline Group slipped 1% after the owner and leaser of shopping malls said a committee of China Securities Regulatory Commission approved its proposal to offer of up to 315 million A-shares in China.