HONG KONG: China and Hong Kong stocks fell on Wednesday, led by a decline in the property sector as market sentiment appeared to cool down after a strong rally.

The weakness also followed a Federal Reserve official’s comments that the US central bank may hold rates steady all year to fight inflation, putting outflow pressure on broad Asian stocks.

The CSI real estate index lost 3.5%, giving up all the gains from the previous session.

Morgan Stanley analysts warned about near-term overbought technical signals in China equities.

“We expect the rally momentum to abate - don’t chase at the index level,” the analysts, led by Laura Wang, said in a note on Tuesday night.

At the close, the Shanghai Composite index was down 0.61% at 3,128.48. The blue-chip CSI300 index was down 0.79%, with its financial sector sub-index lower by 0.69%, the consumer staples sector down 0.12%, and the healthcare sub-index down 1.49%.

The smaller Shenzhen index ended down 1.33% and the start-up board ChiNext Composite index was weaker by 1.449%.

In Hong Kong, the Hang Seng index was down 165.51 points or 0.9% at 18,313.86. The Hang Seng China Enterprises index fell 1.07% to 6,456.72.

The sub-index of the Hang Seng tracking energy shares rose 0.8%, while the IT sector dipped 1.22%, the financial sector ended 0.53% lower and the property sector dipped 2.92%.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.42%, while Japan’s Nikkei index closed down 1.63%.

The yuan was quoted at 7.2265 per US dollar at 0844 GMT, 0.12% weaker than the previous close of 7.2181.

Copyright Business Recorder, 2024