HONG KONG: Hong Kong stocks extended losses on Friday, posting their sharpest weekly decline since March as hawkish comments by U.S. Federal Reserve Chair Jerome Powell dampened market sentiment.

Hong Kong’s Hang Seng Index dropped 1.71%, while the Hang Seng China Enterprises Index declined 1.71%.

The Hang Seng index is down 5.7% this week in a 4-day losing streak, marking its biggest weekly drop since March 10.

Most sectors fell. Tech giants listed in Hong Kong lost 2.1%, with Meituan falling 2.3%.

China’s mainland financial markets were closed on Friday for the Dragon Boat Festival holiday. Markets will resume trading on Monday, June 26.

Broader Asian shares slumped toward their worst week in nine months, as a string of hawkish central bank surprises made investors nervous about the economic cost of taming inflation.

Fed’s Powell reiterated his hawkish stance on Thursday and suggested that the central bank had not reached the end of its tightening cycle.

Overnight, the Bank of England delivered a surprising 50 basis points interest rate hike.

Hong Kong stocks face external risks from both the U.S. rate hike uncertainties and geopolitical issues, Dang Chongyu, an analyst at Sealand Securities, said in a note.

“It’s too early to say in which month will be the lowest point of the year, as it depends on China domestic policies and external risks,” he said.

The lack of southbound flows via stock connect as mainland investors are away for holidays also contributed to the weakness, analysts say.

Hong Kong’s Cathay Pacific Airways bucked the trend and rose 1.5%, as the carrier forecast its first half-year profit in three years, buoyed by a strong rebound in travel demand and one-off gain from a stake sale in Air China.