Hang Seng slips on US-Iran tensions and Fed hike odds
The Hang Seng Index fell 1.1%, or 250 points, to 25,323 on renewed risk aversion. US-Iran tensions lifted Brent crude and Treasuries yields, while markets leaned toward a September US rate hike. China PMI data was mixed.
The Hang Seng Index slipped 1.1%, or 250 points, to 25,323 on Monday, amid heightened risk aversion as renewed US-Iran tensions raised concerns over higher oil prices and inflation.
US forces struck Iranian rocket launchers near the Strait of Hormuz, pushing Brent crude higher and weighing on Asian equities.
Hawkish remarks from Federal Reserve Chair Kevin Warsh also revived expectations of a September US rate hike, with markets pricing a 57% chance of a move.
Higher US Treasury yields and a stronger dollar further pressured risk assets, while investors awaited US jobs and inflation data for clues on the Fed’s policy path.
Meanwhile, China’s manufacturing PMI rose to 49.8 in August from 49.2 in July, beating expectations of 49.7 but remaining in contraction for a second consecutive month.
The non-manufacturing PMI held at 49.0.
Notable losers included Tencent (-0.9%), China Resources Land (-2.8%), AIA (-1.7%), Lenovo (-1.3%), and Zijin Gold International (-8.1%).