Shares of banks and property companies, which are sensitive to interest rate changes, were the major decliners after US new orders and jobs data dampened rate cut hopes
China’s services activity growth accelerated in March, a private-sector survey showed on Wednesday, a sign sentiment was staging a tentative recovery
Hong Kong stocks slipped amid a global risk-off sentiment after strong US economic data sparked a rise in bond yields and a paring back of interest rate cut hopes. This overshadowed upbeat data which showed China’s services activity growth picked up in March as new business rose at the quickest pace in 3 months.
The Hang Seng Index dropped 1.2 per cent to 16,734.41 as of 11.10am local time, after surging 2.4 per cent on Tuesday. The Tech Index lost 1.8 per cent.
Shares of banks and property companies, which are sensitive to interest rate changes were the major decliners. HSBC lost 1.2 per cent to HK$61.15, Hang Seng Bank lost 1.4 per cent to HK$88.85 and Sun Hung Kai Properties declined 2 per cent to HK$75. Xiaomi lost 3.7 per cent to HK$15.68 after it gained 9 per cent on Tuesday following the launch of its first electric car.
Overnight, US job openings edged up and new orders for factory goods rebounded more than expected. That prompted traders to rein in their interest rate cut expectations. Markets now see a 56 per cent chance of a reduction of interest rates by the US Federal Reserve in its June meeting, down from the 69 per cent chance ahead of the data dump.
Other key Asian markets weakened, following the overnight decline on Wall Street. Japan’s Nikkei 225 slipped 1.2 per cent, while South Korea’s Kospi lost 1.4 per cent Australia’s S&P/ASX 200 weakened 1.1 per cent.
