HK Stocks End Lower After Return From Long Weekend

Hong Kong stocks returned from a long weekend to end lower on Tuesday, with southbound buying by mainland Chinese investors dented by a decision to drain liquidity from local markets by the People's Bank of China.

The Hang Seng Index fell 0.7 percent, or 203 points to 28,638.

The benchmark Shanghai Composite Index dropped 0.9 percent, or 33 points, to 3,556, while the Shenzhen Composite Index on the mainland's second exchange eased 0.8 percent, or 20 points, to 2,387.

But markets around the region were mostly up following a record-breaking day on Wall Street, although traders shifted cautiously ahead of the Federal Reserve's next policy meeting later this week.

With coronavirus vaccines rolling out and businesses reopening in many countries, investors are broadly upbeat about the global economic outlook while fears have eased that an expected inflation spike will force central banks to taper their ultra-loose monetary policies.

The release of data last week showing US consumer prices jumped far more than forecast was taken in stride, suggesting a growing acceptance of the Fed's insistence that spikes were to be expected owing to last year's low base of comparison and supply bottlenecks, among other things.

That puts the Fed's latest meeting – and boss Jerome Powell's comments – firmly in the spotlight with dealers looking for an idea about its plans for policy in light of the US economy's blockbuster recovery.

Several observers have warned that its pledge to not start tightening until unemployment is tamed and inflation is running persistently hot could backfire if the economy overheats, which could force it to hike interest rates at a sharper pace.

But trading floors remain nervous places as governments in parts of the world are still battling to overcome the virus and more transmissible variants, which are either forcing them to delay reopenings or reimpose fresh containment measures.

Still, Tokyo ended up one percent, while Wellington added a little more with gains also seen in Sydney, Seoul, Singapore, Taipei, Manila and Mumbai. (AFP)