The Hang Seng Index fell 1.1%, or 250 points, to 25,323 on Monday, as risk aversion increased amid renewed US–Iran tensions that fueled worries over higher oil prices and inflation. US forces struck Iranian rocket launchers near the Strait of Hormuz, lifting Brent crude prices and dragging down Asian equities. Hawkish comments from Federal Reserve Chair Kevin Warsh further strengthened expectations of a US rate hike in September, with markets pricing in a 57% probability of a move. Rising US Treasury yields and a stronger dollar added pressure on risk assets, while investors looked ahead to upcoming US employment and inflation data for guidance on the Fed’s policy trajectory.
In China, the manufacturing PMI climbed to 49.8 in August from 49.2 in July, surpassing the consensus forecast of 49.7 but remaining below the 50 threshold, signaling a second consecutive month of contraction. The non-manufacturing PMI was unchanged at 49.0. Major decliners on the day included Tencent (-0.9%), China Resources Land (-2.8%), AIA (-1.7%), Lenovo (-1.3%), and Zijin Gold International (-8.1%).
