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Hong Kong stocks close down 2.20%

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(Globalpost/GlobalPost)

Hong Kong shares ended 2.20 percent lower on Tuesday, in line with a regional sell-off as investors grow concerned the US Federal Reserve will soon begin reeling in its stimulus programme.

The benchmark Hang Seng Index fell 493.41 points to 21,970.29 on turnover of HK$63.66 billion ($8.21 billion).

Global markets have been in turmoil as investors fret over the future of the $85-billion-a-month Fed stimulus.

Traders are worried that the improving economic condition in the United States means the economy will not need the help the central bank has been providing.

Eyes are on the release Wednesday of minutes from the Fed's most recent meeting, with bank watchers looking for clues about its next move.

Analysts said Hong Kong dealers were not feeling particularly optimistic ahead of the release of the minutes.

"While there has been little changed in terms of fundamentals, there has been a large jump in pessimism," Robert Harding, senior vice president at Kim Eng in Singapore, told the Dow Jones Newswires.

Selling was seen across the board in Hong Kong. Major bank shares each fell more than 2%-- ICBC declined 2.8% to HK$5.15 and Bank of China shed 2.4% to HK$3.30.

Chinese shares closed down 0.62 percent. The benchmark Shanghai Composite Index fell 13.01 points to 2,072.59 on turnover of 89.1 billion yuan ($14.5 billion).

The index was hit by concerns of tighter regulation of the financial sector, after a trading error at China's seventh largest brokerage, Everbright Securities, that sent it up more than five percent on Friday.

"The incident will definitely lead to stronger regulation for the whole financial sector, this is to be expected," BOC International analyst Shen Jun said.

Everbright Securities slumped by its 10 percent daily limit to 10.91 yuan on resuming trading on Tuesday after the stock was suspended on Friday.

Haitong Securities fell 3.28 percent to 10.63 yuan while China Merchants Securities shed 1.81 percent to 10.87 yuan.

Resources shares were also lower. Henan Yuguang Gold & Lead dropped 3.83 percent to 11.04 yuan and Jiangxi Copper fell 2.84 percent to 16.75 yuan.

Shanxi Coal International Energy lost 3.37 percent to 6.03 yuan.

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http://www.globalpost.com/dispatch/news/afp/130820/hong-kong-stocks-close-down-220-0