HSI Drops As HKMA Follows Fed Rate Cut

Hong Kong shares closed lower on Thursday, tracking Wall Street losses after the Fed cut rates but expressed a cautious view about future reductions.

The Hang Seng Index dropped 0.8 percent, to 27,565 after the city's de facto central bank matched the Fed's cut, lowering rates for the first time since 2008.

On the mainland, the Shanghai Composite Index lost 0.8 percent, to close at 2,908 while the Shenzhen Composite Index ended down 0.5 percent, at 1,563.

Tokyo clawed back losses to finish 0.1 percent down, Seoul rose 0.4 percent and Taipei fell 0.9 percent.

The Fed decision sent the US dollar rallying to its highest level in more than two years, while a strong run for oil prices stalled with West Texas futures dropping more than 1.2 percent.

"Commodities should still see some support on easy money flowing throughout all the major central banks in the world," said Oanda Markets senior analyst Edward Moya.

Investors are now awaiting key US economic data, including ISM's nationwide manufacturing index, which will be announced later in the day, and Friday's employment data. (AFP)