Hang Seng Index sinks to decade low as Fed hikes rate
Hong Kong stocks tumbled after the Federal Reserve’s 75 basis points rate hike. Ongoing rate hikes by the U.S central bank alongside concerns about a global economic slowdown has been posing pressure to global markets.
The Hang Seng index slumped by 1.61% to 18,147.95, from this morning's 18,080.93.
The index dropped to 17,965 points during the trading day, reaching a historic low since 2011.
Bank stocks contracted in general. HSBC plunged more than 3% while Hang Seng and Standard Chartered dipped more than 1%.
Real estate stocks closed in red, with New World Development recording a more than 3% slip.
“It’s not time to buy yet as Hong Kong’s stock gauges fall to new lows, with aggressive US interest-rate hikes adding to pessimism around Covid Zero and the ongoing property crisis in China,” Manish Bhargava, fund manager at Singapore’s Straits Investment Holdings told the Standard.
Following the Fed’s third consecutive hike, both HSBC and Bank of China raised their prime rate by 12.5 percentage points to 5.125%. Standard Chartered also upped interest rate to 5.375% from its previous 5.25%.
Hong Kong Monetary Authority, the de facto central bank of the city, also announced an upwards 3.5% Base Rate adjustment.
The three major U.S stock indexes slid by around 1.7% after the hike. Most Asian markets sank, with Japan’s Nikkei Index dropping 0.58%.
“We have got to get inflation behind us,” Jerome H. Powell, the Fed chair, said at a news conference on Wednesday. “I wish there were a painless way to do that; there isn’t.”
The several rounds of raised interest rates have led to the devaluation of at least one-tenth of the world's 36 currencies.
“The Fed has raised interest rates sharply for many rounds, and the U.S. dollar has appreciated rapidly…” Zhao Lijian, the spokesman of the Chinese Ministry of Foreign Affairs, said at the press conference on Thursday. “This has made the weak world economy worse.”
《The Young Reporter》
The Young Reporter (TYR) started as a newspaper in 1969. Today, it is published across multiple media platforms and updated constantly to bring the latest news and analyses to its readers.
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