Hong Kong stocks closed sharply lower Friday after the suspension on Thursday for a public holiday, tracking performance in overseas markets.

The benchmark Hang Seng Index opened 1.18 percent lower, and went down 278.31 points, or 1.34 percent, to close at 20520.66, fluctuating between 20,474.03 and 20,566.26 during the day's trading.

The total turnover rose to 67,976 million HK dollars (8715 million U.S. dollars) from 59,107 million dollars (7578 million U. S. dollars on Wednesday.

All the four major stock categories lost ground. The Finance went down 326.79 points, or 1 percent to close at 32,309.64. The Utilities moved down 293.67 points, or 0.82 percent to close at 35, 695.40. The Properties dropped 320.05 points, or 1.27 percent to close at 24,859.88. The Commerce and Industry sank 193.02 points, or 1.70 percent to close at 11,144.35.

HSBC, the largest stock by market capitalization, edged down 0. 35 percent to end at 144.3 HK dollars after Lehman Brothers cuts back holding to below 3 percent.

China-related shares fell when the market reopened Friday, after the former U.S. Federal Reserve Chairman Alan Greenspan warned on Wednesday a "dramatic contraction" is in sight for China equity market.

Hang Seng China Enterprises Index closed down 224.54 points, or 2.06 percent.

Heavyweight China Mobile, the country's largest telecommunication operator, fell 2 percent to close at 72.15 HK dollars.

Chinese financial stocks also closed lower. China Life dropped 3 percent to close at 24.85 HK dollars. ICBC fell 2 percent to close at 4.11 HK dollars, and Bank of China lost 1 percent to close at 3.85 HK dollars.

The property sub-index shed 1 percent. Cheung Kong fell 1 percent to end at 102.10 HK dollars. Sun Hung Kai Properties dropped 1 percent to end at 91.60 HK dollars. Hang Lung Properties declined 2 percent to close at 24.35 HK dollars.

Local properties are very sensitive to news on interest rates. The strong U.S. housing data for April have dashed hopes of an interest rate cut, and this put a drag on the property sector, said Castor Pang, a strategist at Sun Hung Kai Financial Group.

Lenovo soared 14 percent to close at 3.66 HK dollars after posting better-than-expected fourth-quarter results. It recorded a 60 million U.S. dollars net profit in the fourth quarter ended March 2007, compared with a net loss of 116 million U.S. dollars the year before. "We believe Lenovo should stabilize overseas market share through increasing channel sales, while gradually improving margins through further efficiency improvement and control of operating expense," JP Morgan said in a research report Friday.

"The correction in the HSI is absolutely reasonable," says Celestial's Kitty Chan, adding the index will stay around 20,5000 for now.

Source: Xinhua