Hong Kong stocks fall after Powell’s renomination
05:21, 23 November 2021
Hong Kong’s Hang Seng index fell 1% by lunch break on Tuesday, tracking Wall Street losses overnight after Jerome Powell was nominated to serve his second term as US Federal Reserve chair.
Powell’s renomination removes uncertainties over the Federal Reserve’s (Fed) policies with many market observers now expecting a quicker tightening cycle.
“US Treasury yields rose as uncertainties got lifted. More Fed hikes also got priced into the belly of the curve as the market removed the possibility of an even more dovish Fed. Close to three hikes are now being factored into 2022. However, the equities space was mixed as the sharp spike in yields caused a tumble in the Nasdaq,” said Eugene Leow and Philip Wee of DBS Group Research.
Tech stocks fall in Asia-Pacific
In Hong Kong, tech stocks emerged as the biggest drag on Tuesday as Alibaba Group and Tencent Holdings lost 3% and 2.6%, respectively, by midday.
Similarly, tech stocks in Australia posted big losses as the S&P/ASX All Technology index fell over 3% on Tuesday.
Technology stocks are seen as growth stocks with higher expected future earnings by the market and are more attractive when interest rates are low.
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Aussie benchmark up on energy gains
However, gains in energy and mining firms pushed Australia’s benchmark S&P/ASX 200 index up by 0.8% to 7411.40 on Tuesday.
S&P/ASX 200 Energy index rose 2.5% with Australia’s biggest oil-and-gas company Woodside Petroleum gaining over 3% following the approval of its billion-dollar liquefied natural gas project.
Elsewhere, Japan market was shut for holiday on Tuesday.
Read more: Australia’s Woodside (WPL) jumps on bn LNG project approval
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