AgenciesHONG KONG, November 4: Hong Kong stocks slammed into reverse on Tuesday after notching up some early gains as investors rushed to take profits after a recent rebound, fearing a new downturn in the market.

The Hang Seng Index closed the day on a hefty loss of 474.33 points, or 4.21 per cent, at 10,780.78 after surging to a high of 11,660.97 points in early trade. "Over the last few trading days the index has climbed substantially and people are taking profits before another correction," said Dennis Leung, research manager at J&A Securities (HK). November Hang Seng Index futures fell 720 points to 10,630.

"It was futures-linked selling ahead of the close that depressed stocks," said Sean Li, associate director at Amsteel Securities. "It was reasonable for the market to correct after recent strength. We expect support at about 10,600-10,700."

The Hang Seng Index gained 892.25 points, or 8.61 per cent, over the previous two trading sessions and analysts said there was strong resistance in the 11,600 to 11,800 point zone.

"Once the market approached 11,700, people started to get worried this was just a rebound so they just got rid of their shares," said Michael Ng, dealing director at Sassoon Securities.

China-related stocks also lost their shine after staging a powerful rally during early trade.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.