Hong Kong Market falls after citys central bank hikes rate by 75 bps

28 Jul 2022 , 05:24 PM

Hong Kong share market finished session lower on Thursday, 28 July 2022, after wiping out initial gains, amid concerns about its already stuttering economy after another interest rate hike by the Federal Reserve forced the citys central bank to lift its own borrowing costs. Market participants were concerning that higher borrowing costs may crimp demand for credit and make home mortgages costlier, pressuring the local economy already on the brink of another recession. At closing bell, the benchmark Hang Seng Index declined by 47.36 points, or 0.23%, to 20,622.68. The Hang Seng China Enterprises Index was down 8.89 points, or 0.13%, to 7,082.58. The Federal Reserve on Wednesday again raised the benchmark interest rate by 75 basis points to 2.25-2.5% in its ongoing battle to tamp down raging price pressures that are squeezing Americans. The US Fed Chairman Jerome Powell also stated on Wednesday that the central bank could slow the pace of interest rate increases, depending on the impact of its monetary policy on the economy and inflation. Banks and property developers led losses after policymakers raised the citys key interest rate to a three-year high in lockstep with an expected Federal Reserve hike. The Hong Kong Monetary Authority lifted its base rate by 75 basis points to 2.75% immediately on Thursday, tracking a similar hike in the US to douse inflation. Insurer AIA Group lost 0.9% to HK$79.90 while China Merchants Bank slumped 2.1% to HK$43.05. Developers Longfor Group and China Resources Land retreated by at least 1%. Powered by Capital Market – Live News