HK shares close down 2.1 percent led by financials

HONG KONG, July 3 (Reuters) - Hong Kong's shares closed 2.1 percent lower on Thursday at a fifteen week low, losing close to over 800 points over two straight sessions as financial stocks and insurers plunged on fears of further credit tightening in China.

Europe's largest Bank HSBC (0005.HK: Quote, Profile, Research) slipped 0.8 percent ahead of the European Central Bank's decision on interest rates. The ECB is largely expected to hike rates for the first time in more than a year.

HSBC's local unit Hang Seng Bank (0011.HK: Quote, Profile, Research) fell 3.8 percent and Bank of East Asia (0023.HK: Quote, Profile, Research) gave up 4.1 percent on mounting on speculation over an imminent rate hike in the country and concern about dwindling income from a battered stock market.

Ping An Insurance (2318.HK: Quote, Profile, Research) 601318.HK, the nation's' second largest insurer, plunged 8.6 percent as investors continued to punish the stock on rumours of a government probe into tax evasion, as reported by the official Xinhua news agency.

The company denied the talk. [ID:nSHA343105].

The Hang Seng Index .HSI closed down 461.67 points at 21,242.778, a new 15-week low.

"When there is uncertainity, people want liquidity. Hong Kong is a still a relatively liquid market and it's easy to pull money out of here," said Andrew Sullivan, sales trader with Mainfirst Securities.

But he added: "The turnover is pretty much the same as yesterday, indicating that there is no panic selling."

Mainboard turnover was slightly lower at HK$75.8 billion ($9.7 billion) from HK$76.3 billion on Wednesday.