Hong Kong stocks closed at the lowest level in more than five weeks amid concerns about capital flight from the city’s financial markets while traders await the latest US inflation report that may sway the Federal Reserve’s policy tightening bias. The Hang Seng Index slipped 0.2 per cent to 21,113.76 at the close, the lowest level since January 6. The Hang Seng Tech Index dropped 1 per cent and the Shanghai Composite Index added 0.3 per cent. Alibaba Group declined 1.4 per cent to HK$102.50, while Tencent slid 2.1 per cent to HK$378.60 and NetEase lost 1.3 per cent to HK$137.20. Link Reit slipped 1.4 per cent to HK$54, adding to a 13 per cent slump on Monday. Limiting the losses, search-engine operator Baidu gained 0.4 per cent to HK$143.70, while HSBC climbed 0.8 per cent to HK$58.20. The Hong Kong Monetary Authority bought HK$4.22 billion (US$538 million) in overnight New York trading and sold the equivalent amount of US dollars to protect the currency peg. The local dollar weakened in recent weeks as local banks failed to follow the Fed’s 25-basis point tightening earlier this month. “Sentiment is skittish,” said Xue Wei, an analyst at Ping An Securities. “The rift between China and the US and market volatility will probably increase going forward.” Mainland investors have sold HK$17.3 billion of Hong Kong-listed stocks since January 27 via the Stock Connect programme, sending the Hang Seng Index lower by about 7 per cent in the period. Some analysts are worried gains from China reopening bets since October may have gone too far amid signs of sluggish consumer spending and a moribund property market. HKMA steps in to prop up the local dollar for the first time this year Those concerns added to souring US-China ties following a series of spy balloon incidents, while recent hawkish tones from Fed policymakers also rattled stock and bond investors. Elsewhere, China also took measures to stem capital outflows as local brokerages suspended stock account opening by mainland Chinese investors. A gauge tracking onshore brokerages lost 0.2 per cent, with Orient Securities and Caitong Securities falling by 0.7 per cent and 0.9 per cent respectively. US consumer prices probably rose 6.2 per cent in January from a year earlier, according to consensus from economists tracked by Bloomberg, before a government report later today. Prices rose by 6.5 per cent in December. Consumer-electronic products maker Emdoor Information surged 44 per cent to 50.40 yuan on the first day of trading in Shenzhen, the only market debutant on Tuesday. Major Asian markets all advanced to track overnight gains in US equities. Japan’s Nikkei 225 climbed 0.6 per cent, while South Korea’s Kospi rose 0.9 per cent and Australia’s S&P/ASX 200 added 0.2 per cent.