He told a press briefing that current falls seen in local equity prices are a natural correction due mainly to profit-taking given the market's recent rallies.

But he also pointed out that it would not be unusual for the local bourse to be affected by developments on the mainland given the increasing efforts to integrate the two economies.

"As we see the increasing integration of Hong Kong's economy into that of the mainland, it won't be unusual for developments in China's equity and financial markets to have an impact on Hong Kong," he said.

He also added that the market's current declines are temporary. "I don't see this type of correction as a trend and I don't see a long term decline in the local market."

He allayed concerns over the outflow of funds from the local bourse, saying the Hong Kong market is mature enough to absorb such outflows.

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