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

Hong Kong's stock market took a significant hit on the first trading day of October, with the Hang Seng Index falling by 2.6% by midday. The decline was attributed to surging bond yields and rising oil prices, which have dampened investor appetite for risk assets. Hong Kong's benchmark indices, including the Hang Seng China Enterprises Index and Hang Seng Tech, both experienced declines of over 2%. Among sectors, biotech and financial shares suffered the most substantial losses.

The market's tumultuous mood was further fueled by the heavy selling of global bonds, which has pushed borrowing costs to multi-decade highs across various countries, including the US, France, and Japan. The sustained increase in rates has tightened market liquidity, particularly in interest-rate-sensitive markets like Hong Kong.

The decline also affected Macau gaming stocks listed in Hong Kong, with Galaxy Entertainment experiencing a sharp 6% drop. This was due to the continued decline in gaming revenue in September. Additionally, China's onshore financial markets are set to be closed from October 1 to October 7 for the National Day holidays, with trading resuming on October 8.