China, HK stocks decline as sentiment hit by global bond selloff

HONG KONG: China and Hong Kong stocks fell on Wednesday as a global bond selloff and rising oil prices took a toll on investor sentiment.

China’s blue-chip CSI 300 Index declined 1.3%, while the Shanghai Composite Index lost 0.8%.

Hong Kong benchmark Hang Seng dropped 1%.

The declines tracked overnight losses on Wall Street as a global bond selloff deepened, with 10-year US Treasury yield hitting its highest since 2023 on Wednesday.

Investors increased their bets on a September US interest rate hike as rising hostilities in the Middle East drove up oil prices.

Gold equity stocks dropped 3% to lead declines due to gold’s sensitivity to interest rate.

Auto shares went down nearly 2% as China unveiled guidelines for fair overseas competition.

Most sectors including tech, new energy and real estate were down by midday, while defence stocks outperformed.

Hong Kong’s Hang Seng Tech Index lost 1.5%.

Online fast-fashion retailer Shein’s weak performance in Hong Kong also dragged down sentiment.

It declined 2.2% by the lunch break after a lacklustre debut session on Tuesday following a long-awaited initial public offering.

The market clearly values AI firms more now, and Shein’s case is more challenging because of growing concern over tariffs on small packages,“ said Gary Ng, senior Asia-Pacific economist at Natixis.

The smaller Shenzhen index was down 1.27%, the startup board ChiNext Composite index was weaker by 2.18% and Shanghai’s tech-focused STAR50 index was down 1.32%.

On geopolitical front, Premier Li Qiang said US firms are welcome to seize opportunities and expand and deepen their presence in the Chinese market, during a meeting with a delegation of the US-China Business Council in Beijing.