Hong Kong - Hong Kong stocks fell by more than 1.8 per cent Wednesday as investors dumped shares on continued fears over the global economy.

The benchmark Hang Seng Index fell by 397 points to close trading at 21,704, its lowest level since March. Turnover was 76.2 billion Hong Kong dollars (9.76 billion US dollars).

Analysts blamed global concerns about food and oil prices which is hitting company profits and driving investors away. Speculation that China may hike interest rates also fuelled the selling.

Hong Kong's flagship airline Cathay Pacific led the decline losing 5.9 per cent after issuing a profit warning to investors midday.

The loss reversed an earlier increase after the airline said its 2008 results would be "disappointing" because of rising fuel prices.

The airline, which made a net profit of 909 million US dollars in 2007, said in a statement it was paying on average 60 per cent more for fuel in 2008 than it did in the first half of 2007 and the situation was worsening.

"The most recent spot price for jet fuel is 93 per cent higher than the average price paid by Cathay Pacific in 2007," the statement said. "Investors are advised to exercise caution in dealing with shares of Cathay Pacific. (dpa)