Alibaba, JD.com push Hang Seng to biggest drop in 2 weeks before Fed meeting while developers slide amid more distress
- Tech, developers tumble as traders take money off the table amid concerns about policy tightening risks
- The Fed will hold its first 2022 rate-setting meeting this week; its hawkish stance in recent weeks has erased billions from global tech stocks and cryptocurrencies
The Hang Seng Index retreated 1.7 per cent to 24,243.61 to close near a one-week low. The Tech Index slumped 2.7 per cent for a third day of decline, while China’s Shanghai Composite Index declined 2.6 per cent.
The Federal Reserve, which holds its first 2022 rate-setting meeting this week, has signalled a hawkish stance in the past month, roiling global markets as investors trimmed bets on US tech stocks and cryptocurrencies.
“The Fed has effectively abandoned its prior guidance by suggesting it’s ready to start raising rates” before achieving its employment mandate, BlackRock strategists said in a note on Tuesday. “By doing so, it may have added to the confusion about the expected path of rates. Markets have quickly shifted their short-term expectations to include earlier and more rate hikes this year.”
Major Asia-Pacific markets retreated. Shares in Japan lost 1.7 per cent, while Korean stocks retreated 2.6 per cent. The Australian benchmark index sank 2.5 per cent.
In Hong Kong, Chinese developers tumbled, with an index tracking the industry leaders losing 1.9 per cent, its biggest setback in a week, as Agile Group and Yuzhou Group added to signs of persistent liquidity stress despite recent policy-easing measures.