HSI Falls Sharply Over Fed Report, China-US Tiff

Hong Kong stocks closed with steep losses on Thursday, in line with a global sell-off, as the Federal Reserve raised concerns about the US outlook while lawmakers struggle to agree a new stimulus.

The Hang Seng Index fell 1.5 percent, to 24,791.

On the mainland, the Shanghai Composite Index sank 1.3 percent, to 3,363, while the Shenzhen Composite Index shed 1.2 percent, to 2,225.

Adding to the downward pressure were ever-present China-US tensions, with the White House on Wednesday withdrawing from three bilateral deals with Hong Kong on extradition and taxation over the city's controversial security law.

The move comes after the US revoked Hong Kong's preferential trade status and is the latest blow to an increasingly fractious relationship between the superpowers that has fanned concerns about their crucial trade pact signed in January.

Still, there was some joy in a report from Bloomberg News saying the two planned to hold talks on a review of that agreement that were postponed last weekend.

It comes after Trump said this week that he had called the discussions off, adding he "didn’t want to talk to China right now".

Tokyo closed 1 percent lower while Seoul tumbled more than 3 percent.

Sydney eased 0.8 percent and Taipei was also more than 3 percent off. Singapore sank 1.5 percent Wellington and Bangkok were 0.7 percent down, while Manila dipped 0.6 percent. (AFP)