China, Hong Kong shares ease as global rate concerns weigh

HONG KONG: China stocks edged lower and Hong Kong shares fell on Wednesday, as investors weighed renewed global rates concerns against domestic market stabilization measures.  

At the midday break, the Shanghai Composite index was down 0.2% at 3,654.95 and the blue-chip CSI300 index was down 0.3%.

Tech shares made some cautious gains.

The start-up board ChiNext Composite index was higher by 1% and Shanghai’s tech-focused STAR50 index was largely flat.

The telecommunications sector was among the biggest gainers, with the CSI 5G Communications Index up 3% by the midday break.

Optical communications module maker Zhongji Innolight rose 8.3% in the morning session.

In Hong Kong, the Hang Seng Index was down 0.8% at 24,352.69 and the Hang Seng Tech Index declined 1.4%.

Around the region, equity markets were stuck in a narrow range with traders caught between rate hike expectations and oil-market tensions.

A hotter-than-expected consumer inflation reading in the US and hawkish policymakers drove up bets of a quicker pace of rate hikes.

The resulting rise in global bond yields and strengthening dollar have put pressure on A-share valuations, analysts at Nanhua Futures said in a note.

“This round of recent market recovery has been driven mainly by domestic measures to support markets and a temporary easing of overseas uncertainties,” they said.

“However, both the strength and durability of these factors appear limited. While market sentiment has improved somewhat, investors remain broadly cautious, and stock indexes are expected to trade in a range in the near term.”

Elsewhere, oil prices rose on Wednesday after falling to two-month lows in the previous session, as the market swung between hopes of de-escalation in the Iran war and concerns over continued attacks on shipping in the Strait of Hormuz.