China next in line of fire as Hong Kong stocks sink to 3-1/2-year low
* Financial shares sink, hit by global sell-off in banks
* Volume remains thin in holiday-shortened week
* China FX fixings, data key for trading next week (Updates to close, adds China details)
By Saikat Chatterjee
HONG KONG, Feb 12 (Reuters) - A near 7 percent slump in China shares listed in Hong Kong this week and meltdown in financial markets globally is putting investors on edge ahead of the reopening of mainland China markets on Monday after the long Lunar New Year holiday.
Investors will be watching China's official yuan fixing for any signs that it may be allowing the currency to weaken again to support its ailing exporters. That will be followed by export and import data for January which should hit trading screens soon after stock markets open.
Worries about China's slowing economy and uncertainty over its foreign exchange rate policy were cited as key factors behind global markets' sudden fall in January. But in the past week, with China closed, additional worries have surfaced ranging from the health of European banks to doubts over whether central banks can dole out more effective stimulus.
The Hang Seng Index fell 1.2 percent to a three-and-a-half year low of 18,319.58 on Friday, while the China Enterprises Index lost 1.99 percent, to 7,505.37 points.
For the week, the Hang Seng index lost 5 percent. Continuación...