Asia: Hong Kong Hammered

HONG KONG -- A wave of panic selling pushed the Hang Seng below a key benchmark and to a four-month low Tuesday, and other Asian indices declined substantially, too, as investors mulled reports that China Development Bank won't take a $2 billion stake in Citigroup(C Quote).

The Hang Seng dived 630 points, or 2.4%, to 25,837, while in China the Shanghai Composite Index lost 54 points, or 1%, to 5443.

"Hong Kong has got to take more pain," says Andrew Clark, a trader for SG Securities in Hong Kong. "If the index goes to 20,000, then people will come back because it will have fallen a good 35% from it's highs. At 24,000, people will say, 'yeah, it cheap, but not outstandingly cheap.'" ...