Alibaba, SMIC, Sands drag Hong Kong stocks as US banking crisis infects markets before likely Fed rate hike

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by Yulu Ao at

Hong Kong stocks slipped to a one-week low as renewed concerns about bank failures in the US infected local market sentiment. Investors dumped riskier assets to err on the side of caution before a likely increase in interest rates in the US and at home.

The Hang Seng Index lost 1.2 per cent to 19,699.16 at the close of Wednesday trading, the lowest level since April 26. Ten out of 11 members in the finance sub-gauge weakened. The Tech Index slumped 1.6 per cent. Markets in mainland China are closed for a holiday.

Alibaba Group retreated 2.4 per cent to HK$80.35 while Tencent fell 1.9 per cent to HK$339.40. Chip maker SMIC declined 3.1 per cent to HK$21.80 while developer Country Garden slumped 3 per cent to HK$1.92. Casino operator Sands China fell 4.9 per cent to HK$26.95, while Hang Seng Bank slid 2.2 per cent to HK$113.20.

The S&P 500 Index tumbled overnight, with regional lenders PacWest Bancorp and Western Alliance Bancorp crashing by more than 15 per cent. US regulators seized First Republic Bank and sold the lender to JPMorgan Chase to help restore confidence.

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