China, HK benchmarks slip as gold stocks fall on US rate hike

HONG KONG: China and Hong Kong stock benchmarks declined on Thursday, with rate-sensitive sectors, including gold, non-ferrous metals and properties, slipping after the US raised interest rates for the first time in three years.

China’s blue-chip CSI300 Index and the Shanghai Composite Index dipped 0.4% each by the lunch break.

Hong Kong benchmark Hang Seng fell 0.8%.

The Federal Reserve raised interest rates on Wednesday and flagged more hikes in the coming months, setting a more hawkish tone than markets expected.

In China, CSI gold equities slumped 5%, while non-ferrous metal shares dropped 3%. Hong Kong’s property firms declined 1.9%.

The city raised its base interest rate by 25 basis points to 4.25% on Thursday, tracking the Fed hike.

On the other hand, biotech and semiconductor shares outperformed in both markets. Analysts prefer China A-shares over Hong Kong shares for the rest of the year given they have more exposure to AI hardware and related supply chain.

Due to the consumer-facing nature of leading internet companies listed in Hong Kong, the city’s stocks are more susceptible to weak domestic consumption, they said.

A sustained and meaningful rebound in Hong Kong stocks requires catalysts such as fiscal stimulus or a “DeepSeek moment,” said Kevin Liu, chief offshore China and overseas strategist at CICC.

The smaller Shenzhen index was down 0.24%, the start-up board ChiNext Composite index was weaker by 0.12% and Shanghai’s tech-focused STAR50 index was down 0.39%.