China, HK benchmarks slip as gold stocks fall on US rate hike
- Hong Kong benchmark Hang Seng fell 0.8%
China and Hong Kong stock benchmarks declined after the US Federal Reserve raised interest rates, impacting rate-sensitive sectors. Biotech and semiconductor shares, however, outperformed.
- Impact of US interest rate hike on Asian markets.
- Performance of rate-sensitive sectors.
- Analyst outlook for China A-shares vs. Hong Kong stocks.
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%.