Hong Kong stocks ended a thinly-traded week down and snapped three weeks of gains on Friday, as investors were wary ahead of Donald Trump's inauguration as the 45th US president later in the day.
The benchmark Hang Seng index fell 0.7 percent, to 22,885.91 points at the close, while the China Enterprises Index lost 0.8 percent, to 9,715.72 points.
The benchmark index lost a modest 0.2 percent this week.
"The key risk is Trump's trade policy. The external risk of China is obviously heightened, at the same time how Fed will move policy rates in the US," said Raymond Yeung, chief economist of Greater China for ANZ in Hong Kong. There was little reaction to late afternoon news that China's five biggest banks have been approved to temporarily lower the amount of cash that they must hold as reserves, to ease seasonal liquidity tightness ahead of the Lunar New Year holiday.
Interest-sensitive stocks including property developers and utilities firms retreated more than 0.8 percent on Friday, after Federal Reserve Chair Janet Yellen said that the US central bank should continue to raise interest rates gradually to keep jobs plentiful and inflation low. The city's interest rates usually follow the United States, thanks to a currency peg to the greenback. The energy sector extended Thursday's losses and fell more than 1.2 percent, partially dragged by index heavyweight PetroChina Co Ltd and CNOOC Ltd.
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