The Hang Seng Index dropped 360 points, or 1.5%, to 23,950 on Thursday, marking a third straight session of losses and its lowest close since July 2025. The decline came as investors cut risk exposure after the Federal Reserve adopted a more hawkish stance, signaling that additional policy tightening may still be needed to tame inflation.
Expectations of higher US interest rates pushed up Treasury yields and strengthened the dollar, while weighing on Wall Street overnight and souring sentiment across Asian markets. In Hong Kong, the Monetary Authority kept its base rate unchanged at 4.0%, in line with the Fed’s decision to hold rates steady.
Investors also remained wary amid persistent uncertainty about the global economic outlook and the potential impact of a prolonged period of higher interest rates on corporate earnings and cross-border capital flows. Financial, technology, retail, and energy stocks led the decline, with notable losses in Kingboard Laminates (-4.3%), Pop Mart (-3.4%), Xiaomi (-2.5%), SMIC (-1.9%), and Tencent (-1.2%).
