The Hongkong stock market has suffered a further sharp fall: the main index fell to below 9,000 points before a modest revival. Prices have fallen about 14% this week and there are signs of renewed pressure on the Hongkong dollar. Our economics correspondent, James Morgan, reports:

The latest events in Indonesia are seen as the most frightening developments yet in the East Asian crisis and are reverberating around the region. Hongkong has not been the focus of attention for some weeks but now there are fears that it too is looking at a bottomless pit.

An investment strategist at ABN-Amro Bank in Hongkong, Jake Van der Kamp, is almsot at a loss for words:

"What I think we see here is panic selling, and there's no way any investment analyst can can offer you a fundamental opinion on what'll happen in the short term."

The heavy selling of shares is linked to new pressure on the Hongkong dollar. But at present this pressure is largely coming from companies buying US dollars for future delivery out of fear that the link between the two currencies will be broken.

The financial secretary, Donald Tsang, denies this and has said the crisis will be short-lived because it is caused by external factors. The logic is not entirely clear to many and the markets are flooded with rumours.