Hong Kong stocks fall as surging bond yields, higher oil prices weigh

HONG KONG: Hong Kong stocks dropped on the first trading day of October, as the 10-year US Treasury yield hitting a more-than-two-decade high and rising oil prices dampened investor appetite for risk assets.

Hong Kong benchmark Hang Seng lost 2.6% by midday.

Hang Seng China Enterprises Index and Hang Seng Tech both fell more than 2%.

By sector, biotech and financial shares led the decline.

Global bonds came under heavy selling pressure again on Thursday, sending borrowing costs from the United States to France and Japan to multi-decade highs, putting investors on high alert for further market volatility.

Higher rates tighten market liquidity, especially in interest-rate-sensitive markets like Hong Kong.

Macau gaming stocks listed in Hong Kong declined broadly with Galaxy Entertainment dropping 6%, as the city’s gaming revenue continued to fall in September.

China’s onshore financial markets are closed from October 1 to October 7 for the National Day holidays.

Trading will resume next Thursday, October 8.