China, Hong Kong stocks slump on bets of aggressive Fed rate hikes

SHANGHAI: China stocks fell on Wednesday by their most in three weeks, weighed down fears of fund outflows after hotter-than-expected US inflation data fuelled bets for more aggressive rate hikes by the Federal Reserve.

Hong Kong stocks also tumbled, with the benchmark index posting its worst daily performance in two months.

The blue-chip CSI 300 Index lost 1.1%, while the Shanghai Composite Index was down 0.8%.

The Hang Seng Index and the Hang Seng China Enterprises Index dropped 2.5% each.

Other Asian markets also tumbled after Wall Street saw its steepest fall in two years as US CPI data for August dashed hopes for a peak in inflation.

US Labor Department data showed the headline Consumer Price Index gained 0.1% on a monthly basis versus expectations for a 0.1% decline.