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Hong Kong stocks plunge amid Fed hike bets, high COVID cases in China

Hong Kong stocks plunge amid Fed hike bets, high COVID cases in China

Hong Kong stocks have reportedly taken a hit, with selloffs reaching an 11-year low, with the release of US employment data signaling another intense rate hike. Meanwhile, Chinese onshore stocks sank as well due to limited holiday spending amid increasing COVID-19 cases in the country.

As per reports, the Hang Seng Index sank 3% to 17,216.66 at closing time on Monday, erasing all of the gains from last week and adding to a near HKD 5 trillion ($637 billion) rout among its members this year. The Shangai Composite fell by 1.7% and the Tech Index by 4%.

Ecommerce major Alibaba Group recorded a 3.4% tumble to HKD 78.60, while tech giant Tencent plunged 2.7% to HKD 263, with shopping platform Meituan sinking 6.5% to HKD 161.70. Even BYD slid 3.9% and Xpeng 6.8%.

Macau-headquartered casino and resort operator Sands China fell 9.2%, sportswear brand Li Ning recorded an 8.8% drop, and sports equipment maker Anta Sports plunged 5.3%.

As per the US labor data published last weekend, employers added more than the expected 263,000 jobs last month, and in a surprising move, unemployment hit a five-decade low of 3.5%, hinting that the Federal Reserve will continue hiking its rates.

As per CME group data, Fed funds futures suggest a higher chance of a 0.75% hike during its next meeting.

Chipmakers also suffered losses after the US announced new restrictions on Chinese firms, with Hua Hong Semiconductor having sunk by 9.2% and SMIC by 4.5%.

The move also triggered a collapse in Chinese onshore markets as Hangzhou Changchuan Technology and Advanced Micro-Fabrication Equipment plummeted almost 20% in Shanghai, and SMIC slid 4.2% in Shenzhen.

As of now, the Hong Kong stock market lost HKD 10.7 trillion ($1.36 billion) this year.

Meanwhile, China recorded a surge in new Covid infections from 548 on 1st October to 1,939 on 10th October. According to government data, trips and spending shrunk during the national holiday due to lockdowns and curbs, with travel revenue down 26% on-year.

The government also ramped up its zero-COVID policy to curb any possible holiday flare-ups.

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Pooja Sharma

Pursuing her professional career as a content writer for over two years now, Pooja Sharma is endowed with a post-graduate degree in English Literature. The articles that she writes are a balanced blend of her ever-growing love of language and the technical expertise that she has gained over the years. Currently Pooja pens insightful articles for Newsorigins and numerous other websites, covering subjects such as business, finance, and technology.