UPDATE 1-Hong Kong shares hit 10-week closing low on policy tightening concerns

  • 3/24/2021
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* HSI -2%, HSCE -2.4% * Fed’s Kaplan says he expects rate hike in 2022 * Tencent’s Ma meets anti-trust officials (Updates with closing prices) BEIJING/SHANGHAI, March 24 (Reuters) - Hong Kong stocks marked their lowest close in more than 10 weeks on Wednesday, tracking an overnight slump in Wall Street, on concerns of potential U.S. rate hikes and global policy tightening. Elevated U.S. Treasury yields also dampened risk appetite, sending the Hang Seng index down 2.03% to 27,918.14, its weakest close since Jan. 11. The Hang Seng China Enterprises index fell 2.37% to 10,847.98. With more people getting vaccinated against the coronavirus and as the economy continues to improve, Dallas Federal Reserve President Robert Kaplan said on Tuesday he is among the policymakers expecting the central bank to start raising rates as soon as next year. On Wall Street overnight, the Dow Jones Industrial Average fell 0.94%, the S&P 500 lost 0.76% and the Nasdaq Composite dropped 1.12%. “Investors in Hong Kong are following the overnight risk-averse sentiment in Wall Street as Treasury yield continued hiking,” said Zhang Yanbin, an analyst with Zheshang Securities. “The expectation of Fed to start raising rates in the near future also weighed.” Pony Ma, the reticent founder of Tencent Holdings, met with the country’s anti-trust watchdog officials this month to discuss compliance at his group, two people with direct knowledge said, an indication that China’s antitrust crackdown could soon target other internet behemoths. Leading losses on the Hang Seng index, IT stocks fell 2.4%. Geely Automobile Holdings Ltd, down 11.75%, was the biggest decliner. China’s main Shanghai Composite index closed down 1.3% at 3,367.06 points, while the blue-chip CSI300 index ended down 1.61%. Around the region, MSCI’s Asia ex-Japan stock index was 1.22% weaker, while Japan’s Nikkei index closed 2.04% lower. The yuan was quoted at 6.5251 per U.S. dollar at 0811 GMT, 0.14% weaker than the previous close of 6.516. (Reporting by Shanghai Newsroom, Editing by Sherry Jacob-Phillips and Devika Syamnath)

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