Hong Kong Stocks Down At The Break

Hong Kong stocks went into the break on a negative note on Thursday as China-US tensions returned to the fore, while traders are also awaiting a speech by the head of the Federal Reserve later in the day.

The Hang Seng Index slipped 0.6 percent, or 159 points, to 25,331.

Most markets in the region also fell, and even a fourth successive record on Wall Street was not enough to stoke a rally, with a fresh flare-up in virus cases in the region keeping dealers grounded.

The mood in Asia was more downbeat compared with earlier in the week with Bloomberg News reporting China had fired four ballistic missiles as part of a military exercise by the People's Liberation Army, a day after a US spy plane carried out a flyover.

The region is one of a number of issues that have seen China-US tensions spike in recent months. In July, Washington declared Beijing's pursuit of territory and resources there illegal, explicitly backing the territorial claims of Southeast Asian countries against China.

And on Wednesday it imposed sanctions and restrictions on 24 Chinese companies and associated officials for taking part in building artificial islands in the disputed waters.

The US Commerce Department said the firms "enabled China to construct and militarise disputed outposts in the South China Sea". (AFP)