Hong Kong stocks slip as rate cut bets fade; caution prevails before Fed, inflation data
- Sentiment remains cautious in a week that will see the release of both China and US inflation data
The Hang Seng Index slid 1 per cent to 18,176.34 at the close. The Hang Seng Tech Index dropped 0.5 per cent and the Shanghai Composite Index retreated 0.8 per cent.
Both mainland China and Hong Kong markets were playing catch-up with the global markets sell-offs following last Friday’s robust US non-farm payroll report thar rolled back rate-cut expectations, as they reopened after Monday’s public holiday. The probability of a 25 basis-point cut in the benchmark borrowing costs by the Fed in September has now dropped to 46.7 per cent from 51.3 per cent a week ago, according to CME data.
“Investors should take a more conservative approach to trade Hong Kong stocks now, given there’s a change of liquidity landscape globally,” said Wang Xueheng, an analyst at Gousen Securities in Beijing. “Utilities stocks are recommended in the base-scenario case.”
Chinese gold producer Zijin Mining Group tumbled 4.9 per cent to HK$16.64 after China’s central bank halted the streak of 18-month gold purchases last month and bullion prices slumped. Jewel retailer Chow Tai Fook Jewellery Group sank 3.6 per cent to HK$9.41. Among other leading decliners, China Resources Beer lost 4.2 per cent to HK$30 and electric-vehicle maker Li Auto shed 2.9 per cent to HK$75.85 ahead of an expected ruling this week on the proposal to slap import tariffs on Chinese EVs.