China, Hong Kong Shares Fall As Rate-Hike Concerns Weigh On Sentiment.
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Chinese and Hong Kong equities closed lower as thin trading volumes and mounting expectations of further US Federal Reserve interest rate hikes dampened investor risk appetite. The blue-chip CSI 300 Index dropped 1.6% by the midday break to slip below the 3,900-point threshold, while the Shanghai Composite Index fell 1.8%. Hong Kong’s Hang Seng Index declined nearly 1%, capping a difficult week that saw the Hang Seng slide roughly 3.5% amid profit-taking in previous artificial intelligence market darlings and cooling market liquidity.Technology and industrial sectors bore the brunt of the selling pressure. The tech-heavy STAR50 Index slumped 3% to its lowest level since April, and non-ferrous metal stocks tumbled over 6% with Zijin Mining dropping 7.3% as global industrial metal prices softened. Conversely, energy majors bucked the broader downward trend, buoyed by elevated global crude prices, with PetroChina advancing 1.2%.
Chinese and Hong Kong equities declined on Friday as thin trading activity and growing expectations of further US interest-rate increases weakened investor appetite for risk.
The blue-chip CSI 300 Index fell 1.6% by the midday break, while the Shanghai Composite Index dropped 1.8%, slipping below the 3,900-point level. Hong Kong’s Hang Seng Index declined nearly 1%.
The losses placed both mainland and Hong Kong markets on course to end the week lower. The CSI 300 had lost 1.6% for the week, while the Hang Seng was down around 3.5%, reflecting broader caution among investors.
Market liquidity has weakened over the past month following profit-taking in shares that had rallied sharply on artificial-intelligence optimism. Daily turnover in mainland equities has remained close to the year’s lowest levels, indicating limited investor participation.
Technology stocks faced additional pressure. The STAR50 Index, which tracks technology-focused companies, declined 3% to its lowest level since late April. Hong Kong-listed technology majors also fell around 0.8%.
Non-ferrous metal stocks led the mainland market’s decline, falling more than 6%. Zijin Mining Group dropped 7.3% as industrial metal prices weakened globally. Oil companies moved in the opposite direction, with PetroChina gaining 1.2% as energy prices remained elevated.
Investor sentiment was further affected by expectations that the US Federal Reserve could raise interest rates again. The outlook changed after US producer prices increased in August, driven by higher costs for goods, airline fares and hospital services, reinforcing concerns over inflation.
Against the broader market decline, Chinese artificial-intelligence chipmaker Shanghai Enflame Technology surged about 200% in its Shanghai debut after raising approximately 6.12 billion yuan, or $912 million, through its initial public offering.
