Hong Kong watchdog probes HSBC stock plunge

Hong Kong's securities watchdog said on Tuesday it was investigating a last-minute sell order that pushed shares in banking giant HSBC to their lowest level in almost 14 years.

One single transaction in the city's traditional 10-minute closing auction period yesterday almost doubled the day's losses for shares of HSBC, which ended down 24.1 per cent (See:New rights issue batters HSBC stock).

The Securities and Futures Commission (SFC) said it was looking into the transaction, which reportedly saw 4.7 million shares dumped in the final seconds before the close.

It is believed the shares were dumped by short-sellers hoping to buy them back after the bank completes a 17.8 billion US dollar rights issue.

"The SFC is aware of what has happened in the closing auction session in relation to the movement of HSBC's share price and we are making inquiries," a spokesman for the regulator told news agency AFP.

HSBC closed at 33 Hong Kong dollars on Monday, its lowest level since May 1995. Shares had clawed back 12.9 percent in early trade Tuesday to 37.25.