Hong Kong stocks closed 0.42 percent lower on Thursday, following losses on Wall Street after the Federal Reserve's assessment of the US economy fuelled speculation it may soon wind down its stimulus programme. The benchmark Hang Seng Index slipped 97.65 points to 23,206.37 on turnover of HK$59.20 billion ($7.64 billion).
The losses were in line with a regional sell-off after the Fed said it would hold steady on its bond-buying programme as it awaits further signs the US economy is strong enough to stand on its own feet.
While it made no reference to the potential impact of October's government shutdown and did not hint at future plans for the stimulus analysts noted it did not downgrade its outlook from earlier statements. This led some to suggested the central bank could begin to reel the scheme in as early as December. A wind down would see the bank pump less cash into the financial system, in turn drying up the money that has helped fuel an investment splurge since September last year, when the plan was unveiled.
Aluminium Corp of China slipped 3.33 percent to HK$2.90 while China Minsheng Banking lost 2.41 percent to end at HK$8.890.
Investors also pulled back Thursday on Chinese bank stocks after three days of gains amid fears of growing bad debt within the sector. ICBC shares fell 0.7 percent to HK$5.43, HSBC was off 0.64 percent at HK$85.45 and shares of Bank of Communications - which reported an increase in bad loans - fell 1.1 percent to HK$5.67.
Chinese shares closed down 0.87 percent. The benchmark Shanghai Composite Index fell 18.85 points to 2,141.61 on turnover of 88.6 billion yuan ($14.5 billion).
"Expectations for a sustained economic recovery and reforms have waned as it's unlikely we will see any substantial reform measures" come out of the Communist Party plenum next month, BOC International analyst Shen Jun told AFP.
Environmental protection-related stocks and shares linked to a new free-trade zone in Shanghai led the declines. Zhejiang Feida Environmental Science & Technology fell 5.93 percent to 20.00 yuan while Fujian Longking dropped 5.53 percent to 33.32 yuan.
Shanghai Waigaoqiao Free Trade Zone Development tumbled 6.62 percent to 36.84 yuan and Shanghai Jinqiao Export Processing Zone Development fell 2.27 percent to 11.18 yuan.
Property developers bucked the trend to rise after reports Chinese President Xi Jinping had called for increasing housing supply.
Poly Real Estate rose 1.82 percent to 9.51 yuan while developer Gemdale added 1.74 percent to end at 5.84 yuan.
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