Hang Seng Index Plunges Amid Fed Rate Hike and Trade Tensions

The Hang Seng Index plummeted to its lowest level since July this year, reaching 24,468 points. This represents an over 11% drop from its highest point in August.

The decline is attributed to the Federal Reserve's decision to raise interest rates by 0.25% to between 3.75% and 4%. Officials hinted that further hikes may be necessary if inflation remains high, which seems likely given soaring crude oil prices.

The escalating US-China trade conflict also weighed on the Hang Seng Index, with President Donald Trump's call for the Fed to cut rates to 1% sparking controversy. Economists argue that Trump is mistaken in his views on trade deficits, pointing out that the US still exports goods and services worth over $3.4 trillion annually.

The index's technicals confirm its downtrend, with a broken bullish pennant pattern and a move below the 50-day Exponential Moving Average (EMA). The next potential support level is around 24,000 points.