Summary Global traders are on edge as Greece and its creditors remain locked
HONG KONG (AFP) - Hong Kong shares fell 1.10 percent Tuesday, tracking losses in New York and Europe on concern about Greece s future in the eurozone, while mainland stocks tumbled on liquidity worries.
The benchmark Hang Seng Index lost 295.11 points to close at 26,566.70 on turnover of HK$123.15 billion (US$15.89 billion).
Global traders are on edge as Greece and its creditors remain locked in a stalemate over reforming its bailout, with each side blaming the other.
With just two weeks to go before Athens must pay billions of dollars to service its debts, talks between the two sides broke down in less than an hour on Sunday.
Now the country s combative anti-austerity leaders accuse the European Union and International Monetary Fund of making "irrational" demands, while the creditors say they have made huge concessions.
On Tuesday Greek Finance Minister Yanis Varoufakis said he would not present a new list of reforms to his EU counterparts at a meeting this week, telling the German daily Bild: "The Eurogroup is not the right place to present proposals which haven t been discussed and negotiated on a lower level before."
However, he added that his team was "available at any time" to find a comprehensive solution.
Greece must reach an agreement on the reforms to unlock the last tranche of its rescue package, which will be used to repay the IMF. Failure to do so will put it in default and could see it ejected from the eurozone.
In Hong Kong share trading, insurer China Life fell 2.84 percent to HK$34.20, Lenovo lost 2.69 percent to HK$10.86 and Tencent shed 0.71 percent to HK$11.26.
Cathay Pacific slipped 1.38 percent to HK$18.56, casino operator Galaxy Entertainment dipped 0.30 percent to HK$33.15 and HSBC gave back 0.90 percent to HK$71.95.
- Liquidity fears -
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In Shanghai the benchmark composite index tumbled 3.47 percent, or 175.56 points, to 4,887.43 on turnover of 895.4 billion yuan ($146.4 billion).
The Shenzhen Composite Index, which tracks stocks on China s second exchange, lost 3.59 percent or 110.41 points to 2,962.66 on turnover of 805.4 billion yuan.
Mainlanders, prompted by fears over cash availability, took profits after a barnstorming rally over the past year.
Starting Wednesday 25 companies will launch initial public offerings which will drain funds away from the existing market.
"Investors are pretty sensitive at this level, with the index having run up a lot," Wu Kan, Shanghai-based fund manager at Dragon Life Insurance, told Bloomberg News.
"Once there s negative news such as liquidity, they tend to sell first. It also looks like investors are now dumping growth stocks," he said.
The current batch of IPOs, including Guotai Junan Securities, may lock up 6.68 trillion yuan of liquidity, according to a median estimate of six analysts surveyed by Bloomberg News.
China s market regulator has also banned investors from borrowing money for trading from channels outside of the margin trading system.
"This move has also hurt market sentiment and it will pull out around one trillion yuan of funds from the current market," Northeast Securities analyst Shen Zhengyang told AFP.
Railway firms led the decline in Shanghai. China Railway Construction plunged by its 10 percent daily limit to 19.22 yuan and CRRC also lost 10 percent to 21.58 yuan.
Pharmaceutical companies also fell. Shanghai-listed Shandong Lukang Pharmaceutical gave up 9.90 percent to 21.29 yuan while Shenzhen-listed Qianjiang Yongan Pharmaceutical dropped 9.39 percent to 29.90 yuan.
