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The Hang Seng Index fell 0.7 per cent to 25,902.69 as of 10.11am local time. The Hang Seng Tech Index dropped 1 per cent.
On the mainland, the CSI 300 Index climbed 0.1 per cent and the Shanghai Composite Index retreated 0.2 per cent.
Alibaba Group Holding fell 1.5 per cent to HK$154.60 and Tencent Holdings lost 0.6 per cent to HK$613.50. Online game operator NetEase retreated 3 per cent to HK$217.60 and China Construction Bank lost 3.1 per cent to HK$7.91.
Caution returned to the market after a recovery in risk appetite spurred a rebound in Hong Kong stocks alongside global equities. Investors are gearing up for the coming policy meetings by the US Federal Reserve and the Bank of Japan in the coming weeks, with rate decisions expected to have a pronounced impact on global capital flows.
The Fed is widely expected to lower the benchmark interest rate by 25 basis points this month, while Japan’s central bank will probably raise the borrowing costs for the first time since July last year, marking a shift from an ultra-loose monetary policy. Investors remain wary of a repeat of the turbulence that followed Japan’s last rate hike, which unwound the yen carry trade and rattled global assets.
