SHANGHAI: Hong Kong shares ended lower on Thursday after the US Federal Reserve cautioned it would ease the pace of rate cuts next year, while China stocks were mixed. China’s blue-chip CSI300 Index closed up 0.1%, while the Shanghai Composite Index dropped 0.4%. The Hong Kong benchmark Hang Seng was down 0.6%.

The Hong Kong Monetary Authority (HKMA) cut its base interest rate on Thursday, tracking a move by the Fed whose overnight remarks suggested fewer cuts next year. “As the rate cut becomes very uncertain for 2025, investors have a low appetite for Hong Kong equities, where most are rate sensitive,” said Kelly Chung, chief investment officer, multi assets at Value Partners. Hong Kong’s monetary policy moves in lock-step with the United States.

“The weak RMB and record-low China bond yields have also pressured sentiment,” Chung said. China’s yuan fell to around 7.3 per dollar on Thursday, the weakest level since November 2023.

Real estate shares and energy shares slipped in China, while gains in tech shares provided some offset. Vanke’s onshore and offshore stocks were down 2.8% and 4.7%, respectively, after media reported that China asked insurers to report their debt holdings of the company.

Shares of Chinese property developer Sunac China Holdings dropped more than 4% in early trade, following reports that the company has initiated arbitration proceedings against Wanda Group. Shares of Chinese electric vehicle battery maker CATL were little changed after media reported that the firm is considering a Hong Kong listing that could raise at least $5 billion. Tech shares traded in Hong Kong were down 0.7%.