Hong Kong - Hong Kong stocks fell 4.04 per cent Thursday, joining a regional downward spiral in share prices after heavy overnight losses on Wall Street.

The blue-chip Hang Seng Index closed at 12,298, down 517 points. Turnover was 44.6 billion Hong Kong dollars (5.75 billion US dollars).

At one point, the index fell more than 6 per cent and threatened to close below 12,000; however, it bounced back slightly in later trading to stay above that barrier.

The fall come after the Dow Jones Industrial Average in the United States fell 5 per cent overnight to close below 8,000, triggering falls in regional markets, including Australia, Japan and South Korea.

The US economic woes also resulted in the Hong Kong dollar testing the upper limits of its US dollar peg.

A report on the government radio station RTHK said the Hong Kong Monetary Authority was forced to inject 15.5 billion Hong Kong dollars (1.9 billion US dollars) into money markets Thursday to try to stop the Hong Kong dollar strengthening beyond the peg.

The authority has already intervened several times this week as the local dollar appreciated to the upper limits of the peg as it bought about 30 billion Hong Kong dollars of US dollars to maintain the peg.

The Hong Kong dollar is pegged to the US dollar at 7.8 but can trade between 7.75 and 7.85. (dpa)