Hong Kong Stocks Slip as US Rate Hike Widens Yield Premium

China and Hong Kong stocks declined in response to the US Federal Reserve's decision to raise interest rates, which put pressure on sectors sensitive to borrowing costs.

The CSI300 Index and Shanghai Composite Index fell by 0.4%, while the Hang Seng Index dropped by 0.3%. The smaller Shenzhen Index was down 0.2%, with the ChiNext Composite Index declining 0.4%.

The Federal Reserve raised its benchmark interest rate by 25 basis points, taking the target range to 3.75%-4%. It also signaled that another increase could come later in the year, giving markets a more hawkish signal than some investors had expected.

Gold-related shares and Hong Kong property companies were among the biggest decliners, with the CSI gold equity index falling by 4% and the sector index declining nearly 1%. The higher US rates widened the yield premium over China, adding to concerns about capital flows.