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China, Hong Kong stocks slump on bets of aggressive Fed rate hikes

China, Hong Kong stocks slump on bets of aggressive Fed rate hikes

Reuters · 09/14/2022 04:47
China, Hong Kong stocks slump on bets of aggressive Fed rate hikes

Updates to market close

- China stocks fell on Wednesday by their most in three weeks, weighed down fears of fund outflows after hotter-than-expected U.S. inflation data fuelled bets for more aggressive rate hikes by the Federal Reserve.

Hong Kong stocks also tumbled, with the benchmark index posting its worst daily performance in two months.

** The blue-chip CSI 300 Index .CSI300 lost 1.1%, while the Shanghai Composite Index .SSEC was down 0.8%.

** The Hang Seng Index .HSI and the Hang Seng China Enterprises Index .HSCE dropped 2.5% each.

** Other Asian markets also tumbled after Wall Street saw its steepest fall in two years as U.S. CPI data for August dashed hopes for a peak in inflation.

** U.S. Labor Department data showed the headline Consumer Price Index gained 0.1% on a monthly basis versus expectations for a 0.1% decline.

** "The overnight plunge in the U.S. market dented sentiment in China's A-shares," said Wang Mengying, a stock index futures analyst at Nanhua Futures, adding that investors would continue to focus on domestic COVID-19 outbreaks and anti-virus measures, and the implementation of pro-growth policies.

** New energy shares .CSI399808 slumped 2%, automobiles .CSI931008 went down 1.6%, and consumer discretionary stocks .CSIASCDI lost 1.3%.

** Bucking the trend, the aerospace defence sector .CSI399959 gained 1.6%.

** Tech firms listed in Hong Kong .HSETCH tumbled 2.9%, with e-commerce giant Alibaba Group 9988.HK down 4.5% to become the biggest drag on the Hang Seng benchmark.

** Financials .HSCIF declined 2.2%, with heavyweights HSBC Holdings 0005.HK and AIA Group 1299.HK down more than 2.5% each.

** China International Capital Corp 3908.HK, 601995.SS slumped 9.2% in Shanghai and 8% in Hong Kong after the broker proposed a rights issue to support business development and boost capital.

** Investors' focus will shift to the Chinese central bank's medium-term policy loan operation on Thursday, with traders and analysts widely expecting a pause in monetary easing effort amid widening policy divergence between China and the United States.

(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)