Interest Rate Fears Weigh Down Hong Kong Stocks

Hong Kong stocks fell on Monday with most other Asian markets on concerns about the repercussions from US-led strikes on Syria, while property firms were hit by worries about rising interest rates.

The Hang Seng Index dipped 1.6 percent, to 30,315.

On the mainland, the benchmark Shanghai Composite Index lost 1.53 percent, to 3,110 and the Shenzhen Composite Index fell 0.5 percent, to 1,824.

Property firms in Hong Kong took a hit on fears of an end to the era of low interest rates as Hong Kong Monetary Authority was forced to support the local dollar, which is at 7.85 to the greenback, the lowest end of its band with the US unit.

The HKMA spent about HK$3.6 billion boosting the currency on Monday, which has been hit by a flow of cash out of the city to the United States in search of higher interest rates.

Chang Liu, China economist at Capital Economics, warned there was a concern that the HKMA's move would raise interest rates in the city, which could hammer the property market

and have a knock-on effect for the economy.

Asian markets were mixed with analysts saying investors were hopeful the Syria crisis would not escalate.

Tokyo ended in positive territory, up 0.3 percent, while Sydney edged up 0.2 percent and Seoul 0.1 percent.

Singapore fell 0.2 percent, while Wellington and Taipei also declined. (AFP)