China, Hong Kong stocks drop on hawkish US Fed stance

China and Hong Kong stocks slipped on Thursday as risk sentiment took a blow after the U.S. Federal Reserve's hawkish policy statements signalled another rate hike by year-end and much tighter monetary policy through 2024 than previously expected. ** China's blue-chip CSI 300 Index declined 0.61% while the Shanghai Composite Index slid 0.59%.

China and Hong Kong stocks slipped on Thursday as risk sentiment took a blow after the U.S. Federal Reserve's hawkish policy statements signalled another rate hike by year-end and much tighter monetary policy through 2024 than previously expected.

** China's blue-chip CSI 300 Index declined 0.61% while the Shanghai Composite Index slid 0.59%. ** Hong Kong's Hang Seng Index fell 1.31%, while the Hang Seng China Enterprises Index dropped 1.38%.

** Asian stocks followed Wall Street's lacklustre lead, dipping across the board as the tough message from the U.S. Fed pressured markets. ** The Fed held interest rates steady on Wednesday, but stiffened a hawkish monetary policy stance.

** The U.S. central bank raised its end-2024 and 2025 dot plot projections by 50bp each, essentially signalling "higher-for-longer" rates, Nomura analysts said in a note. ** "Rising U.S. bond yields, stronger USD and elevated energy prices – all are ingredients for a bad recipe for Asian stocks," Nomura said.

** The reaction from the U.S. equity markets to the Fed's decision was bearish and opened the door for follow-up sell-offs, said Redmond Wong, Greater China market strategist at Saxo Markets. ** "This development in the U.S. market weighed down the already cautious sentiment in the Hong Kong and mainland markets," he said.

** Meanwhile, to restore market confidence, China pledged to speed up the introduction of more policies to consolidate its economic recovery, state media CCTV reported on Wednesday, citing a cabinet meeting chaired by Premier Li Qiang. ** Big tech firms listed in Hong Kong fell 2.2%, with both Tencent and Alibaba losing 2%.

** Shares of Country Garden climbed 1% after the embattled Chinese giant said it has won approval from creditors to extend repayment of seven bonds as of Sept. 12.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)