China, HK benchmarks slip as gold stocks fall on US rate hike

HONG KONG: China and Hong Kong stock benchmarks declined on Thursday, with rate-sensitive sectors, including gold, non-ferrous metals and properties, slipping after the US raised interest rates for the first time in three years. China’s blue-chip CSI300 Index and the Shanghai Composite Index dipped 0. 4% each by the lunch break. Hong Kong benchmark Hang Seng fell 0. 8%. The Federal Reserve raised interest rates on Wednesday and flagged more hikes in the coming months, setting a more hawkish tone than markets expected. In China, CSI gold equities slumped 5%, while non-ferrous metal shares dropped 3%. Hong Kong’s property firms declined 1. 9%. The city raised its base interest rate by 25 basis points to 4. 25% on Thursday, tracking the Fed hike. On the other hand, biotech and semiconductor shares outperformed in both markets. Analysts prefer China A-shares over Hong Kong shares for the rest of the year given they have more exposure to AI hardware and related supply chain. Due to the consumer-facing nature of leading internet companies listed in Hong Kong, the city’s stocks are more susceptible to weak domestic consumption, they said. A sustained and meaningful rebound in Hong Kong stocks requires catalysts such as fiscal stimulus or a “DeepSeek moment, ” said Kevin Liu, chief offshore China and overseas strategist at CICC. The smaller Shenzhen index was down 0. 24%, the start-up board ChiNext Composite index was weaker by 0. 12% and Shanghai’s tech-focused STAR50 index was down 0. 39%.

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