HK index drops on US rescue plan worries

The blue chip Hang Seng Index shed 252.34 points, or 1.33 percent, to finish at 18,682.09.

Analysts said investors decided to stay away from stocks after an emergency meeting between U.S. lawmakers and President George W. Bush failed to agree on the $700 billion rescue plan.

Their confidence was also eroded following the collapse of Washington Mutual Inc., one of the nation's biggest banks, analysts said.

"They have lost all confidence. The failure of Washington Mutual just deepened the sentiments," said Francis Lun, general manager of Fulbright Securities Ltd.

"Even investors want to buy stocks, they have no money."

The Seattle-based bank was seized by the Federal Deposit Insurance Corp. Thursday in the largest failure ever of a U.S. bank, after which JPMorgan Chase & Co. Inc. came to its rescue by buying the thrift's banking assets.

Lun said the downward market trend will remain in the near term until the U.S. launches the rescue package.

Most blue chips were lower Friday, with China Mobile losing 3.1 percent to HK$77.80.

In oil issues, major refiner China Petroleum & Chemical Corp., or Sinopec, dropped 3.8 percent and upstream producer CNOOC slid 2.4 percent.