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Hong Kong, Chinese stocks slide as sentiment sours on Fed outlook for recovery

  • Stock benchmarks in Hong Kong and Shanghai lost further ground on global recovery outlook
  • Four Chinese stocks soared on their first day of trading on mainland bourses

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A man looks at an electronic stock board showing Japan's Nikkei 225 index at a brokerage firm in Tokyo, Japan. Photo: AP
Daniel Ren
Losses in Hong Kong and mainland Chinese stocks deepened on Thursday, tracking declines in the region and overnight US markets which reflected traders’ disappointment over the Federal Reserve‘s take on the economic recovery outlook.
The Heng Seng Index dropped 1.6 per cent to 24,340.85 at the close, while the Shanghai Composite Index slid 0.4 per cent to 3,270.44. Both indices have retreated by more than 3 per cent this month, reining in a rally this quarter.

Top losers included Xiaomi Corp which retreated 6.4 per cent while Wuxi Biologics and Techtronic Industries each fell by 4 per cent and 3.1 per cent, respectively. City train operator MTR Corp led gainers, adding 1.8 per cent.

While the Fed pledged its policy would remain accommodative, it also observed that the pace of economic activity is likely to slow and added that additional stimulus spending may be needed to support gains in the US job market.

The Fed statement “is no real surprise, but may disappoint those who were looking for more explicit guidance on how policy would respond to changing economic conditions,” Schroders chief economist Keith Wade wrote in a research note.

The Fed said gains in economic activity and employment in recent months remained well below their levels at the beginning of the year, following the conclusion of its last scheduled meeting before the November elections. The Covid-19 crisis continues to weigh on the economy, it added.

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