Hong Kong stocks sank by the most in two months led by another round of sell-off in Alibaba Group Holding as more analysts trimmed their price targets before its earnings. The Federal Reserve reiterated its hawkish stance, signalling the first rate increase in March. The Hang Seng Index retreated 2 per cent to 23,664.80 at the close of Thursday trading after slumping as much as 3 per cent in the worst day since September 20. The Tech Index tumbled 3.8 per cent, the most in three weeks, while China’s Shanghai Composite Index lost 1.8 per cent. Alibaba, the owner of this newspaper, plunged 7.2 per cent to an all-time low of HK$108.50. Meituan retreated 6.9 per cent while both NetEase and JD.com lost at least 3.5 per cent. Tencent fell 2.2 per cent. More than 20 analysts have trimmed their price targets for Alibaba’s US or Hong Kong-listed shares over the past month, including at least three this week, according to Bloomberg data. The firm may report its third-quarter results as early as next week, according to precedent. Alibaba Healthcare Information slipped 4.3 per cent to HK$5.99 after Goldman Sachs downgraded the stock to neutral from buy on Thursday, with a price target of HK$8. The stock has lost 9.1 per cent this year. Higher borrowing costs “are likely to continue to pressure highly valued part of the equity market,” Kelly Craig, global market strategist at JPMorgan Asset Management, said after the Fed decision. “Yields should rise, but growth worries may keep investors cautious in the near term.” The Federal Reserve plans to raise interest rates soon to fight inflation, roiling US stocks and cryptocurrencies this month. It expects to start bond-tapering after lift-off to fight US inflation at 39-year high, it added. “The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March,” it said. “Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month.” Major Asia-Pacific markets fell. Japanese and Korean shares lost at least 3.1 per cent, while the Australian benchmark declined 1.8 per cent. Meanwhile, the CSI 300, which tracks top companies in Shanghai and Shenzhen, has declined about 3 per cent this week, before a five-day break from January 31 for the Lunar New Year. The Hang Seng lost 3.6 per cent. Markets in Hong Kong fell in the week preceding the Lunar New Year in five of the past 10 years. Separately, Hong Kong is battling the Delta and Omicron variants in the current fifth wave of infections, clouding efforts to resuscitate the local economy. Four major clusters have kept health officials busy, including a lockdown on one large housing estate. Anhui Tongguan Copper Foil Group and Guangdong Weide Information Technology rose at least 24 per cent on its trading debut. Great Microwave Technology fell 9 per cent. In Hong Kong, Qingdao Ainnovation Technology lost 26 per cent on its first day of trading.