A SUDDEN plunge by shares of mainland firms listed in Hong Kong had traders scrambling to find a trigger for the slump that coincided with a surge in futures volumes.

    The Hang Seng China Enterprises Index tumbled from an advance of 1 percent to a loss of 1.5 percent in about two minutes, before rebounding to a gain.

    Stocks including Tsingtao Brewery Co. and PetroChina Co. fell sharply at 2:14 p.m. in Hong Kong before paring losses. The same shares in Shanghai didn’t replicate the move.

    “Everyone is trying to figure it out,” said Jackson Wong, associate director at Huarong International Securities Ltd. in Hong Kong. “We have been trading on low volume without any major news, so there may have been something that triggered some bigger funds to sell a certain position or using futures to hedge and that triggered the domino effect for that moment. But that’s only my speculation.”

    More than 5,000 May futures on the H share gauge changed hands in a minute from 2:14 p.m. as the price of the contracts slumped 143 points. Before that, volume in each minute of trading yesterday had averaged about 200 contracts.

    Hong Kong’s exchange operator hasn’t received any reports of erroneous trades and is closely monitoring market activities, spokeswoman Lorraine Chan said.

    The volatility comes at a testing time for Hong Kong traders in the wake of the mainland’s stock market meltdown.

    The measure of 40 mainland companies entered a technical correction Friday after falling more than 10 percent from its recent high as a bull market rebound unraveled. (SD-Agencies)