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China and Hong Kong indexes have fallen on the background of fears about the Fed rate increase

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China and Hong Kong indexes have fallen on the background of fears about the Fed rate increase

China and Hong Kong indexes have fallen on the background of fears about the Fed rate increase
September 12
16:00 2016

On Monday China’s blue chips index has fallen to its lowest point for three months, following the sudden collapse of global markets due to the investors’ anxiety about the potentially possible increase in the US interest rate next week. These rumors have raised the yields on government bonds and put pressure on the yuan.

CSI300 Index, which reflects the stock prices of the largest companies that are traded in Shanghai and Shenzhen, has fallen by 1.7 percent, amounting to 3.262,60 points. This has been the strongest drop since 13 June. Shanghai Composite Index of the Shanghai Stock Exchange has lost 1.8 percent and ended the session at the level of 3.021,98 points, showing the worst session since 27 July.

The investors are worried that the rate may be increased by the Fed next week, after the head of the Federal Reserve Bank of Boston Eric Rosengren reported that the US economy would be able to endure such a step because it had achieved the full employment and low interest rates made ” overheating “of the economy more likely.

Citing two traders, Reuter’s reported that state banks of China were selling dollars in order to maintain the stability of the national currency at the start of the trading session. This happened after the Bank of China suddenly dropped the exchange rate in order to keep the national currency stable in the early trading.

Hong Kong’s main index have fallen by more than 3 percent because of the global sales in the financial markets, which intensified on the background of the exacerbated concerns that central banks have reached the limits of their policy aimed at the increase of the growth rate.

The index Hang Seng have fallen by 3,4 %, amounting to 23.290,60 points. Among other markets, this has been the worst dynamics and the biggest drop of the day since 11 February.

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