HONG KONG: China and Hong Kong stocks slipped on Thursday as risk sentiment took a blow after the US Federal Reserve’s hawkish policy statements signalled another rate hike by year-end and much tighter monetary policy through 2024 than previously expected.
** China’s blue-chip CSI 300 Index declined 0.61% while the Shanghai Composite Index slid 0.59%.
** Hong Kong’s Hang Seng Index fell 1.31%, while the Hang Seng China Enterprises Index dropped 1.38%.
** Asian stocks followed Wall Street’s lacklustre lead, dipping across the board as the tough message from the US Fed pressured markets.
** The Fed held interest rates steady on Wednesday, but stiffened a hawkish monetary policy stance.
** The US central bank raised its end-2024 and 2025 dot plot projections by 50bp each, essentially signalling “higher-for-longer” rates, Nomura analysts said in a note.
** “Rising US bond yields, stronger USD and elevated energy prices – all are ingredients for a bad recipe for Asian stocks,” Nomura said.
** The reaction from the US equity markets to the Fed’s decision was bearish and opened the door for follow-up sell-offs, said Redmond Wong, Greater China market strategist at Saxo Markets.
** “This development in the US market weighed down the already cautious sentiment in the Hong Kong and mainland markets,” he said.
** Meanwhile, to restore market confidence, China pledged to speed up the introduction of more policies to consolidate its economic recovery, state media CCTV reported on Wednesday, citing a cabinet meeting chaired by Premier Li Qiang.
** Big tech firms listed in Hong Kong fell 2.2%, with both Tencent and Alibaba losing 2%.
** Shares of Country Garden climbed 1% after the embattled Chinese giant said it has won approval from creditors to extend repayment of seven bonds as of Sept. 12.
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