HONG KONG -- Hong Kong will raise the trading stamp duty to 0.13 percent, a senior official of the Hong Kong Special Administrative Region government said Wednesday.

"Having duly considered the impact on the securities market and our international competitiveness, we have decided to introduce a bill to raise the rate of Stamp Duty on Stock Transfers from the current 0.1 percent to 0.13 percent," financial secretary Paul Chan said when delivering the annual budget.

The benchmark Hang Seng Index closed down 914.40 points, or 2.99 percent, at 29,718.24 points on Wednesday. The index once slipped to 29,532.68 points.

Analysts said the market has witnessed considerable growth this year and Wednesday's retreat occurred on the rising U.S. treasury yield and the increase of stamp duty in Hong Kong.