Hong Kong - Banking giant HSBC Tuesday tried to reassure small investors in Hong Kong who have seen the value of their shares plunge 24 per cent then rebound
14 per cent within 24 hours.

HSBC's chief executive for the Asia-Pacific Sandy Flockhart said Monday's sudden plunge in share prices just before the market closed was caused by "technical trade" and not panic selling.

"This bank is making money, and it's making money for shareholders," Flockhart told a news conference. "We will come through this storm."

The roller-coaster share ride came days after HSBC announced it planned to raise capital through a rights issue during which shares will be offered at a reduced price to existing shareholders.

At Tuesday's news conference, Flockhart insisted HSBC had a loyal base of shareholders ready to support the right issue. However he did not answer questions on why the bank had failed to issue a profit warning.

After a 24 per cent plunge in the closing minutes of trade Monday, HSBC shares rebounded by nearly 14 per cent to end the day at 37.60 Hong Kong dollars.

The Security and Futures Commission launched in inquiry into why the hare price plunged so rapidly Monday, with one sale accounting for 12 per cent of the decline.

Hong Kong's financial secretary John Tsang Tuesday joined a chorus of concern over the volatility of the bank's shares, which are one of the major blue-chips on the Hang Seng Index.

"I know many Hong Kong people are are very concerned about the ups and downs of the prices," Tsang said. (dpa)