Hong Kong shares were led lower on Tuesday by banking giant HSBC as its shares resumed trade following its results and rights issue announcement; HSBC was down 18.0% at HK$46.70. Merrill Lynch cut its HSBC target price by 41.2% to HK$42.91, and kept its rating on the shares at underperform.

“Sentiment has turned more bearish following HSBC’s rights issue plan, which means more selling pressure expected ahead,” said Jackson Wong at Tanrich.

Goldman Sachs Group Inc., JPMorgan Chase & Co. and the eight other banks underwriting HSBC Holdings Plc’s record rights offer will share about $500 million in fees during the slowest year for European stock sales since 2003.

Shares of HSBC dropped 10.8%, or 53.25 pence (67 cents), to 438.00 pence ($5.50) in morning trading in London.

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