Hong Kong shares close morning sharply lower

Share prices closed the morning sharply lower, tracking losses on Wall Street overnight following weak US economic data and further profit-warnings, dealers said.

They said reports that China Telecom has secured regulatory approval for an H-share listing has added to the pressure on already weak telecom stocks.

"Sentiment has been further hit by the overnight fall on Wall Street and more corporate profit warnings in the US," said Patrick Yiu, vice president of sales department at Kingsway Securities.

Yiu pointed out that the technicals suggest that a strong support is only likely to emerge below the benchmark index level of 9,000 points.

"For the time-being, the market will be dictated by external factors. On the local front, sentiment is likely to turn around only after the completion of the fourth quarter sales of the Tracker Fund and IPOs," Taiwan Securities vice president Alan Kei said.

The Hang Seng index closed the morning down 190.45 points or 2.02% at 9,237.34, off a high of 9,260.47 and a low of 9,210.94.

The Hang Seng September contract was at 9,229 points.

The China Enterprises index was down 26.02 points at 1,900.07 and the CAC index 33.96 points lower at 973.87.

The GEM index was down 1.89 points at 125.30.

The Tracker Fund was down 0.20 at 9.45.

Telecom stocks are among the major losers in the market on concerns that investors will switch in China Telecom.