HONG KONG: China and Hong Kong stocks fell on Wednesday as investors were cautious ahead of the US Federal Reserve’s rate decision later in the day, while uncertainties surrounding the Middle East war continued to weigh on sentiment.
China’s blue-chip CSI300 Index retreated 0.3percent by the lunch break, while the Shanghai Composite Index dipped 0.4percent. Hong Kong benchmark Hang Seng was down 0.17percent.
Real estate stocks dropped 2.1percent, as property developers including Sunac China reported huge annual losses; energy stocks also lost 2.1percent. In Hong Kong, a 23percent slump in Tencent Music shares dragged Hang Seng Tech down 0.8percent.
Investors are now focused on the Fed’s policy decision on Wednesday. Although markets expect the US central bank to keep rates unchanged, traders will be looking for its commentary on inflation and the economic outlook amid the US-Israeli war on Iran. The extended closure of the Strait of Hormuz also weighed on investor confidence, as China relies heavily on Iranian oil imports.
Investors are closely monitoring oil prices and “are wary of market risks arising from a shift in Federal Reserve policy or any unexpected turn of events in the war”, analysts at Nanhua Futures said in a note.
Adding to that, Beijing is restricting certain Chinese companies incorporated overseas from seeking listings in Hong Kong. The smaller Shenzhen index was unchanged for the day, the start-up board ChiNext Composite index rose 0.89percent and Shanghai’s tech-focused STAR50 index was up 0.44percent.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.27percent, while Japan’s Nikkei index was up 2.67percent.
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