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Zhang Shidong

Stocks in Hong Kong and mainland China fell on Thursday, after the US Federal Reserve raised interest rates for the first time in three years and signalled that further tightening remained on the table.
The benchmark Hang Seng Index dropped 0.4 per cent to 24,604.29 at the close. The Hang Seng Tech Index lost 0.3 per cent. Rate-sensitive stocks such as property developers and gold producers led the decline.
On the mainland, the CSI 300 Index slipped 0.5 per cent, while the chip-heavy Star Market 50 index retreated 0.6 per cent.
The Fed raised its benchmark interest rate by 0.25 percentage points to a target range of 3.75 per cent to 4 per cent at its September policy meeting. The so-called dot plot, which the US central bank uses to signal its outlook for the path of monetary policy, pointed to one more increase this year.
Resilient growth and higher rates could benefit sectors such as financials, consumer discretionary and industrials
Tai Hui, JPMorgan Asset Management in Hong Kong
Fed chair Kevin Warsh described the increase as the removal of a “dose of accommodation,” language that traders interpreted as signalling that policy remained accommodative rather than restrictive.
“There are no immediate signs that inflation will ease. This means the Fed may continue tightening in order to achieve its target,” said Tai Hui, a strategist at JPMorgan Asset Management in Hong Kong.
“Resilient growth and higher rates could benefit sectors such as financials, consumer discretionary and industrials. We still see [Asian] technology benefiting from ongoing demand expansion despite caution around model development.”
With the rate rise potentially heralding a new tightening cycle, investors are shifting their attention to how many additional increases lie ahead.
Higher borrowing costs could squeeze corporate profit margins, raise funding costs for artificial intelligence infrastructure investments and suppress the stretched valuations of technology stocks. The outlook adds to challenges facing Chinese equities, which are already contending with uneven economic growth characterised by fragile domestic demand and strong exports.
The rate rise also adds to a difficult macro-environment for global stocks. Over the past few weeks, equities have faced pressure from bond sell-offs that drove up the 10-year US Treasury yield to nearly 5 per cent, coupled with a sustained energy shock triggered by the US-Israel war on Iran. Those headwinds have been partly offset by resilient corporate earnings and the AI boom.
“The message points to a Federal Reserve that is increasingly confident in the US economy and labour market, while remaining concerned about second-round inflation effects from supply-side shocks,” said Michael Langham, an economist at Aberdeen Investments.
“We therefore continue to expect another [0.25 percentage-point rise] in December before the Fed pauses through most of 2027.”
The Fed decision came in line with Warsh’s commitment to bring inflation back to 2 per cent and restore the credibility of the world’s biggest central bank, which is under pressure from US President Donald Trump to lower borrowing costs.
Sun Hung Kai Properties sank 1.3 per cent to HK$108.20 and Hang Lung Properties fell 2 per cent to HK$6.60 after the Hong Kong Monetary Authority followed the Fed by raising the city’s base rate by 0.25 percentage points. Higher rates tend to dampen housing demand by increasing mortgage costs.
Laopu Gold shed 3 per cent to HK$363 and Zijin Mining Group slid 1.6 per cent to HK$33.86 as higher interest rates traditionally diminished the appeal of non-yielding assets such as gold. Gold prices, however, rebounded on Thursday morning as analysts remained bullish on the metal’s long-term outlook.
Investors will now keep a close watch on Japan’s looming rate decision on Friday, when the nation’s central bank is expected to raise borrowing costs by 0.25 percentage points to a 31-year high of 1.25 per cent. The move is expected to have a substantial impact on risk assets globally that were bought by the Japanese yen-financed carry trade.


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Investors look to Japan’s next rate decision after the Fed points to further tightening this year


Investors look to Japan’s next rate decision after the Fed points to further tightening this year.


Hong Kong stocks decline after Fed raises interest rates and signals more to come

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Investors look to Japan’s next rate decision after the Fed points to further tightening this year

Investors look to Japan’s next rate decision after the Fed points to further tightening this year