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Hong Kong stock market
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Hong Kong stocks slide to 2-week low on Fed rate decision and China manufacturing data

China’s official manufacturing purchasing managers’ index falls to 49.3 in July from 49.7 in June

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Exchange Square in Central. Photo: EPA-EFE
Zhang Shidongin Shanghai
A solid run for Hong Kong stocks showed signs of slowing, as the city’s benchmark closed at a two-week low after the US Federal Reserve appeared resistant to an imminent interest rate cut and China’s manufacturing sector shrank unexpectedly.

The Hang Seng Index fell 1.6 per cent to 24,773.33 at the close on Thursday, a level not seen since July 17. Still, the gauge achieved a third monthly gain, rising 2.9 per cent in July, as China-US tensions eased and after better-than-expected economic growth was reported on the mainland in the first half.

The Hang Seng Tech Index dropped 0.7 per cent. On the mainland, the CSI 300 Index slid 1.8 per cent and the Shanghai Composite Index retreated 1.2 per cent.

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Biotech firm Wuxi AppTec slumped 5.6 per cent to HK$105.70 after unveiling a share placement plan to raise HK$7.85 billion (US$1 billion). Gold producer Zijin Mining Group shed 6.1 per cent to HK$20.95 as the Fed’s decision on rates weighed on bullion prices. Meituan sank 4.6 per cent to HK$121.60 on media reports that major shareholder Prosus would trim its stake in the delivery-service provider. Chinese property developers slumped after the Politburo refrained from introducing additional measures to stabilise real estate prices.

Investors have shifted their attention to economic fundamentals and corporate results as the US has struck trade deals with most of its major partners and is close to extending a tariff pause with China. July’s economic data from China and earnings reports will be of interest to investors who are looking for fresh catalysts after global equities recovered losses sparked by US tariffs.

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US stocks gave up most of their gains and Treasury yields edged higher after the Fed left its benchmark borrowing cost unchanged for a fifth meeting in a row. Chair Jerome Powell also resisted pressure from US President Donald Trump by saying that no decision had been made about easing monetary policy in September. The probability of a September rate reduction dropped to 40 per cent from 70 per cent, according to Aberdeen Investments.
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