Hong Kong's battered stock market nose-dived Monday on bad news from abroad and expectations of even tougher times at home.

The key Hang Seng index fell 383.43 points, or 4.8 percent, closing at 7,552.77. The loss followed drops of 3.89 percent last week and more than 4 percent the previous week.Traders blamed a sharp fall Friday on Wall Street, the weakness of the Japanese yen resulting from uncertainties about the new government of Prime Minister Keizo Obuchi, and concerns about the domestic economy.

After the market closed, the government reported the economy shrank by 2.8 percent in the first quarter, revising an earlier estimate of a 2.0 percent contraction.

Giant HSBC Holdings, Hong Kong's leading bank, also announced its net profit fell 16 percent to $2.4 billion in the first half of the year. HSBC accounts for a third of the weight of Hong Kong's benchmark stock index.

Hong Kong withstood much of Asia's financial turmoil in the first months after it began last summer, but now has been dragged down into recession. Besides the negative growth, unemployment is at a 15-year high. The economy is being slowed further by cargo problems at the new Chek Lap Kok airport.

The dollar hit a seven-week high of 145 yen early today in Asia.

The Hang Seng index is nearing its low for the year: 7,462.5, which it reached in mid-June.