Hang Seng Index Slumps On Protest Worries

Hong Kong shares sank on Thursday as hopes for US interest rate cuts were overshadowed by worries about the city's economy and the impact of protests that are now in their third month.

The Hang Seng Index dived 0.8 percent, to 26,048.

But on the mainland, the Shanghai Composite Index added 0.1 percent, to 2,883 and the Shenzhen Composite Index closed 0.4 percent, higher at 1,578.

But investors in Asia were playing it cool ahead of Fed chairman Jerome Powell's address to the central bankers' symposium at Jackson Hole, Wyoming, on Friday.

Tokyo ended 0.1 percent higher and Sydney gained 0.3 percent. Singapore put on 0.1 percent and Wellington gained 0.2 percent while Taipei was marginally higher.

But Seoul closed down 0.7 percent, Manila shed 1.3 percent, Mumbai retreated 0.6 percent and Jakarta lost 0.6 percent.

Stephen Innes of Valour Markets said the July minutes of the Fed meeting – when it cut rates for the first time since the financial crisis – "painted a convincing enough picture that the Feds will continue to go along with the market's expectations for more cuts, as they will not want to tighten financial conditions, but at the same time not feel pressured to get ahead of the curve".

But Oanda senior market analyst Jeffrey Halley pointed out that the minutes showed two governors wanted a 50 basis-point cut, two did not want a cut at all and the rest settled on 25 basis points, which was eventually chosen.

"It is hard to see Mr Powell announcing or implying an aggressive new easing cycle in isolation when just a month ago, the [policy board] was clearly very split as well," Halley said. (AFP)