The Hang Seng Index fell 1.11 per cent yesterday after investors sold the three blue chips primarily responsible for the Hong Kong market's recent rebound as bears settled in before the United States Federal Reserve's rates meeting next week. Hutchison, China Telecom and Cheung Kong contributed 103.1 points to the index's 180.73-point drop to 16,086.74. HSBC and property developers also weighed on the benchmark. Profit-takers jumped to attention after the market leapt to a month's trading high of 16,525.02 in the morning session following Wall Street's rally on Monday. 'The market had gone up 2,700 points already. If it couldn't break the 16,500 resistance level, we expected a correction,' Celestial Asia Securities director Josephine Hui Suet-ming said. The index clawed back from a close of 13,722.7 on May 26 to 16,434.38 on Friday. Dao Heng Securities deputy head of institutional sales Geoff Galbraith said: 'We're at the upper bands of resistance and need more incentives to move forward, such as a convincing trend on Wall Street.' China Telecom has been the lead mover during the recent climb, gaining 33.19 per cent since May 26. In the same period, Cheung Kong rose 21.63 per cent and Hutchison 20.42 per cent. Yesterday, Hutchison hit a high of $103.50 before closing 2.22 per cent down at $98.75. 'Hutchison was initially up on Husky news but that didn't pan out,' Mr Galbraith said, referring to a report yesterday that the Canadian associate Husky Oil would go public through a takeover of rival Renaissance Energy. Hong Kong could regain its momentum if US markets continued to trade higher before next week's Fed meeting. Many analysts have revised expectations that the Fed will need to ratchet up the tightening process. Westpac Institutional Bank economist Bill Evans is one example. He bagged calls for a further 50 basis points in rises by August after recent data pointed to declining building starts, durable sales, car sales and a slowdown in manufacturing in the US. 'This run of weak data has ensured that the Fed will not tighten on June 28 but will wait for further signs through to the August 22 meeting,' Mr Evans said. 'If weak trends in the data are sustained, the Fed is highly unlikely to move in August. 'If the Fed did, unexpectedly, move, the markets would not respond by pricing in further moves but would assume a Fed overshoot and the US dollar and bond yields would fall more sharply than if nothing was done.'