China, Hong Kong shares head for weekly drop on Fed rate concerns
SHANGHAI: China and Hong Kong stocks slipped on Friday and were on track to close the week lower, as thin trading volumes and growing expectations of further US interest rate hikes dampened risk sentiment. China’s blue-chip CSI300 Index dropped 1.6% by the lunch break, while the Shanghai Composite Index lost 1.8% to below 3,900 points. Hong Kong’s benchmark Hang Seng was down nearly 1%. For the…
China and Hong Kong's stock markets experienced a weekly decline on Friday, with a potential for further losses as trading volumes remained light and the likelihood of more US interest rate increases loomed. The CSI300 Index, a blue-chip index in China, fell by 1.6% by midday, while the Shanghai Composite Index dropped 1.8% to trade below 3,900 points.
Meanwhile, Hong Kong's Hang Seng Index declined by nearly 1%. Over the week, the CSI300 Index had slumped by 1.6%, and the Hang Seng Index had decreased by 3.5%. Investor sentiment had soured over the past month due to profit-taking from an earlier record-breaking rally driven by AI. Additionally, liquidity had dried up, with daily trading volumes of onshore shares hovering near their lowest levels for the year.
The tech-focused STAR50 Index was down 3%, marking its lowest point since late April. Non-ferrous metal shares plummeted more than 6%, with Zijin Mining Group falling the most at 7.3%, as metal prices declined broadly. Despite these losses, oil shares managed to rise, with PetroChina up by 1.2%. Sentiment was further dampened as expectations of a Fed rate increase rose following a spike in US producer prices in August, driven by higher costs for goods, airline fares, and hospital services.
Tech giants listed in Hong Kong fell by 0.8%. Chinese artificial intelligence chipmaker Shanghai Enflame Technology saw a surge of about 200% in its Shanghai debut on Friday, as it raised 6.12 billion yuan ($912 million) in its initial public offering.
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