June 15 Hong Kong stocks fell to a three-week
low on Thursday, led by the property sector, as borrowing costs
in the city looked set to rise after a U.S. interest rate hike.
An index tracking mainland companies listed in the city
posted its biggest one-day percentage loss in six weeks, amid
worries that China's economic recovering is losing steam.
The Hang Seng index fell 1.2 percent, to 25,565.34,
while the China Enterprises Index lost 1.6 percent, to
Hong Kong's central bank raised its base rate 25 basis
points earlier in the day after the U.S. Federal Reserve lifted
its policy rate as expected overnight. Hong Kong rates move in
line with the U.S. due to the city's currency peg.
The head of the Hong Kong Monetary Authority (HKMA), Norman
Chan, said he expects banks in the territory to gradually raise
mortgage rates, which could hit shares of property developers.
Chan added he expects there could be an increase in capital
outflows from the financial hub due to arbitrage trade with the
Most sectors fell, with the decline led by the real estate
sector, which is vulnerable to higher borrowing costs.
(Reporting by the Samuel Shen and John Ruwitch; Editing by