Hong Kong stocks fall as surging bond yields, higher oil prices weigh

By Reuters News

HONG KONG, Oct 2 (Reuters) - Hong Kong stocks dropped on the first trading day of October, as the 10-year US Treasury yield hitting a more-than-two-decade high and rising oil prices dampened investor appetite for risk assets.

** Hong Kong benchmark Hang Seng .HIS lost 2.6% by midday.

** Hang Seng China Enterprises Index .HSCE and Hang Seng Tech .HSTECH both fell more than 2%.

** By sector, biotech .HSBIO and financial shares .HSCIF led the decline.

** Global bonds came under heavy selling pressure again ​on Thursday, sending borrowing costs from the United States to France and Japan to multi-decade highs, putting investors on high alert for further market volatility.

** Higher rates tighten market liquidity, especially in interest-rate-sensitive markets like Hong Kong.

** Macau gaming stocks listed in Hong Kong declined broadly with Galaxy Entertainment 0027.HK dropping 6%, as the city's gaming revenue continued to fall in September.

** China's onshore financial markets are closed from October 1 to October 7 for the National Day holidays. Trading will resume next Thursday, October 8.

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