Feb 26 (Reuters) - Hong Kong stocks ended sharply lower on Friday, in line with broader markets, posting their worst week in one year, as a rout in global bonds sent yields flying and dampened appetite for risky assets.
The Hang Seng index fell 3.6% to 28,980.21, while the China Enterprises Index lost 4.0% to 11,247.21 points.
For the week, HSI tumbled 5.4%, while HSCE slumped 7.1%, both logging their steepest drops since the week to March 13, 2020.
Yields on the 10-year Treasury note eased back to 1.494% from a one-year high of 1.614%, but were still up 40 basis points for the month in their biggest move since 2016.
Adding to the pressure were worries over Sino-U.S. trade relations.
Katherine Tai, President Joe Biden's top trade nominee, backed tariffs as a "legitimate tool" to counter China's state-driven economic model and vowed to hold Beijing to its prior commitments.
This week's retreat also came after a stamp duty hike that hit sentiment hard and deterred southbound funds.
The stamp duty will rise to 0.13% of the value of the transaction from the current 0.1% on Aug. 1, Hong Kong Financial Secretary Paul Chan announced in his annual budget speech.
"It's an asset class type rotation now that you really looking at, because there's nothing that's impervious to the sell-off," said Andy Maynard, head of equities at China Renaissance in Hong Kong.
"Southbound (money) is cautious now. The day before yesterday was record selling for them and where they haven't had a sale day since 2021 started. So, you got to feel that we are probably in the crosshairs of complete or a healthy correction", he added.
Mainland investors sold a net HK$3.1 billion ($399.68 million) of Hong Kong shares via the Stock Connect on Friday, according to Refinitiv data, following a daily record outflow of HK$20 billion on Wednesday.
($1 = 7.7563 Hong Kong dollars)
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