In this file photo dated July 31, 2021, statues are seen on the square of Hong Kong Exchanges and Clearing Limited (HKEX) in south China's Hong Kong. (PHOTO / XINHUA)

Hong Kong stocks tumbled to a new low of the year after a three-day holiday weekend amid renewed concerns over the outlook of a sustained period of elevated global interest rates and the Chinese mainland’s real estate woes.

The benchmark Hang Seng Index fell 2.69 percent to 17,331.22 on Tuesday, surrendering all its advances last Friday.

The Hang Seng Tech Index shed 2.63 percent, with delivery giant Meituan plunging 4.01 percent to HK$110 ($14.05) and the e-commerce giant JD.com dropping 3.21 percent to HK$111.4.

Hong Kong's stock market has been reeling from bearish market sentiment. The Hang Seng Index retreated 3.1 percent in September and 5.9 percent in the third quarter

Hong Kong-listed property stocks were firmly in the red. Beijing-based Longfor Group traded 6.53 percent lower while Hong Kong developer New World Development lost 5.25 percent.

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Among the market highlights is the resumption of trading of China Evergrand’s shares. The distressed developer soared as much as 42 percent before narrowing the increase to 28.13 percent. Its stock was suspended last Thursday after a report that its chairman and founder Hui Ka-yan had been taken away by police.

Hong Kong's stock market has been reeling from bearish market sentiment. The Hang Seng Index retreated 3.1 percent in September and 5.9 percent in the third quarter. So far this year, it has fallen nearly 14 percent, turning out to be one of the worst performers among major stock markets across the globe.

“The highly skeptical sentiment, combined with extremely fragile confidence in Hong Kong stocks, is giving investors cold feet as the market opens its doors to a new full quarter of uncertainty,” said Hebe Chen, a Melbourne-based market analyst at IG International.

Despite some early signs of stabilization in the mainland's underwhelming post-pandemic economy, fears centered on the property crisis are far from dissipating, she said.

In early August, mainland real estate behemoth Country Garden missed interest payments on some dollar bonds and another one on September 17, becoming the latest casualty of the beleaguered property sector, which was once a pillar of growth but now the biggest drag in the world's second-largest economy.

“Instead, as the clock is now ticking for the end of the traditional golden months in the property market, the fact that there's no strong sign of recovery will further deepen fears of a snowball effect in the remainder of the year,” Chen added.

Markets in the Chinese mainland are closed for a week-long “golden week” holiday. The southbound trading of the cross-boundary Stock Connect program was also halted during the break, which is likely to lead to a decline in Hong Kong market turnover.

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“Looking ahead, there are few possible sources that could brighten the sky for the Hong Kong market. One is a convincingly sustainable economic recovery, which may be judged by the Q3 GDP figures and inflation data due later this month. Or, a preliminary resolution to the property turmoil will also be viewed as a positive catalyst,” Chen said.

Contact the writer at evanliu@chinadailyhk.com