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Hong Kong stocks plunge in morning session

/ 03:41 PM December 15, 2016
Hong Kong Financial Markets

A woman walks past an electronic board showing Hong Kong share index outside a local bank in Hong Kong, Thursday, Dec. 15 2016. AP

Shares tumbled in Hong Kong, led by property firms, after the Federal Reserve lifted interest rates and indicated a further three hikes next year.

The Hang Seng Index shed 1.69 percent, or 380.48 points, to 22,076.14 by the break. A Fed rate hike affects borrowing costs in Hong Kong as the city’s monetary policy is linked to the United States.

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And the benchmark Shanghai Composite Index slipped 0.29 percent, or 9.22 points, to 3,131.31 but the Shenzhen Composite Index, which tracks stocks on China’s second exchange, rallied 1.13 percent, or 22.15 points, to 1,982.01.

Cheung Kong Property fell 2.62 percent to HK$50.15, while New World Development tumbled 3.03 percent to HK$8.31.

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Sino Land sank 2.01 percent to HK$11.70 and Hang Lung Properties fell 2.30 percent to HK$16.96.

“The increase in interest rates will also have a negative effect on Hong Kong’s property stocks”, said Jackson Wong, a securities analyst at Huarong International.

He added the rate hike was causing China’s 10-year bonds to tumble, and the mainland’s banks were “performing a lot worse than the overall market” over concerns Beijing is stepping up efforts to curb capital outflows. TVJ

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TAGS: Federal Reserve, Hang Seng Index, Hong Kong, Interest Rates
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