Hong Kong and Shanghai stocks suffered a beating on May 23, amid worries of a deepening European debt crisis and a liquidity crunch on the A-share market. The Hang Seng Index lost 488.37 points or 2.11% to close at 22,711.02, while the Shanghai Composite Index dived 83.89 points or 2.93% to 2,774.57. “The market thinks there is a possibility that Greece may default. If that happens it may be quite bad for global financial centers,” said Alastair Chan, Economist with Moody’s Investors Service. The Hang Seng dropped below its 200-day moving average on May 23 which had been seen as a strong technical support for the market, and in Shanghai, the benchmark hit its lowest level since February 10. Andrew Freris, Asia Chief Investment Adviser for BNP Paribas Wealth Management, said even if Greece were to default, it should have a minimal impact on Asian economies, because Asian banks are holding only a tiny amount of Greek debt. The launch of the international board is widely seen as a negative factor, Morgan Stanley Huaxin Funds Management Co said in a report, as it will certainly divert current capital, and the companies expected to be listed on the board will add pressure to the overpriced shares on the market. Analysts recommended buying consumption related shares and blue chips with low valuations, following a drop in the market last week. Steel firms led the decliners after data by the China Iron and Steel Association (CISA) showed that both steel prices and demand fell amid the impact of tightening measures. Thermal power plants fell as growing coal prices eroded companies’ profits and caused a nationwide shortage of electricity supply.