Hk shares end at 3-yr low; worst wk since Asian crisis

* HSI at near 3-year low, worst week in nearly 11 yrs

* Main index at less that half its peak value in Oct 2007

* All index stocks in the red

(updates to close)

HONG KONG, Oct 10 (Reuters) - Hong Kong shares sank 7.2 percent to a nearly three-year low on Friday, mirroring sell-offs in markets across the globe as investors worried about the risks of a global recession.

The main index dropped 16.3 percent, or more than 2,800 points, in its worst weekly percentage drop since the market meltdown of January 1998.

"It's not about valuations, it's not about fundamentals, it's only about sentiment. And for as long as the sentiment is this weak, we will continue to fall," said Andrew Sullivan, sales trader with Main First Securities.

The valuations of blue chip stocks is languishing at a 10-year low and rapidly heading towards the bottom touched during the Asian financial crisis of 1997/98.

"The rate cuts have had no impact and the bailout plan will kick in only next month...investors are concerned," he said.

The benchmark Hang Seng Index .HSI dropped 1,146.37 points to 14,796.87 after earlier falling to 14,398.54, its lowest since November 2005. The index plunged 9.7 percent in the afternoon after major European indexes tumbled 10 percent in arly trade.

Brokers said there was no sign of panic-selling on Friday, since most retail investors apparently had sold down their holdings in the first part of the week while funds had most likely pulled out their money earlier on.

Mainboard turnover stayed slim at HK$69.4 billion but higher than Thursday's HK$60.9 billion.

The main index has shaved off more than half its value since it hit a peak of 31,958.41 in October 2007, piggybacking on China's resurgent economy and financial markets.

Only 34 of the 1,088 traded issues rose on Friday, while the Hang Seng Index and China Enterprises Index were awash with red tickers, with some of the world's largest stocks piling up double digit losses

The China Enterprises Index .HSCE of top locally listed mainland Chinese companies shed 7.9 percent at 7,135.80.

The Dow Jones Industrial Average .DJI nosedived 7.3 percent on Thursday, falling below 8,600 points for the first time since May 2003.  Continued...