Hong Kong, China (BBN)-Hong Kong shares joined the downward trend across Asia as trading resumed after the Lunar New Year break.
The Hang Seng opened with a sharp four per cent drop to 18,508.96 points, reports BBC.
Markets in China remain closed due to a longer new year break.
Those markets that were open in the region over the past days had all seen hefty losses.
Japanese shares had tumbled in to bear territory after a two day rout, but the Nikkei is closed on Thursday for a national holiday.
The biggest losses on the Hang Seng were seen by HSBC falling 5.3 per cent while Tencent, AIA and China Mobile all shed more than 4 per cent in early trade.
The ongoing concern over the global economy and China’s slowing growth was confirmed by US Federal Reserve chair Janet Yellen in a speech to Congress on Wednesday.
She warned that financial conditions in the United States have recently become “less supportive of growth” while China’s “unclear” currency policy was fuelling global stock market volatility.
“This uncertainty led to increased volatility in global financial markets and, against the background of persistent weakness abroad, exacerbated concerns about the outlook for global growth.”
While she said she was confident China’s economy was not facing a “hard landing”, Yellen said the overall uncertainty created by the world’s second-largest economy was behind some of the steep falls in global commodity prices, which in turn were creating stress for exporting nations.
Korean shares also resumed trade after the new year break and joined the regional downward trend. Seoul’s Kospi fell sharply by 2.7 per cent to 1,865.56 points in morning trade.
Car makers were among the worst hit as fresh data showed that vehicle exports fell by almost 20 per cent in January due to falling demand in emerging markets.
Hyundai and Kia both lost almost 2 per cent while Ssangyong shed as many as 4 per cent.
Australian shares though managed to edge higher on Thursday, providing some relief after two days of losses.
The ASX/200 was 0.3 per cent higher at 4,790.20 points after losing more than 4 per cent lost since the beginning of the month.
Before the market open, airline Virgin Australia reported a swing back to half-yearly profit after cutting costs and profiting from lower fuel prices.
“All fundamental business metrics are in place for the group to report a profit for the 2016 financial year,” Virgin Chief Executive Officer John Borghetti said in a statement.
The forecast of full-year profitability comes after two years of net losses.
Investors though seem to have expected better results and remain cautious about the airline’s prospects.
Virgin Australia shares fell by more than 5 per cent in mid-day trade.