China, Hong Kong shares head for weekly drop on Fed rate concerns

According to Business Recorder, mainland Chinese and Hong Kong shares fell on Friday and were set for a weekly decline, as sparse trading and rising bets on more US interest rate increases weighed on risk appetite. The CSI300 slid 1.6% by the lunch break, while the Shanghai Composite fell 1.8% to a level under 3,900 points. Hong Kong's Hang Seng was off by almost 1% in the same session.

Over the week, the CSI300 has given up 1.6% and the Hang Seng has retreated 3.5%. Onshore sentiment has softened over the past month, after investors booked gains from an AI-driven surge that set records earlier this year. Daily turnover in mainland shares this week sat close to the year's bottom, underscoring weak liquidity.

Oil shares bucked the trend, with PetroChina rising 1.2%, while non-ferrous metal stocks fell over 6% and Zijin Mining Group lost 7.3%. The tech-focused STAR50 gauge dropped 3%, its weakest since late April. Expectations of a Fed rate increase grew after August producer price data showed higher costs for goods, air travel fares and hospital charges. Shanghai Enflame Technology rose about 200% on its Shanghai debut after raising 6.12 billion yuan ($912 million) in its initial public offering.