By Summer Zhen
HONG KONG, March 8 (Reuters) - Hong Kong stocks slumped,
while China shares also slipped on Wednesday after U.S. Federal
Reserve Chair Jerome Powell said the U.S. central bank will
likely need to raise interest rates more than expected.
** China's blue-chip CSI 300 Index fell 0.66%,
while the Shanghai Composite Index slid 0.48%.
** The Hang Seng Index dropped 2.53%, while the Hang
Seng China Enterprises Index tumbled 2.9%.
** Wider Asian equities fell sharply as Powell's hawkish
comments on Tuesday raised the possibility of the Fed returning
to large rate hikes to tackle sticky inflation.
** "With central banks determined to defend their
credibility, rates are likely to rise higher and stay at
restrictive levels for longer than markets currently expect,
particularly in the U.S. and the UK," said Matthew Quaife, head
of Multi-Asset Investment Management, Asia at Fidelity
International.
** "We believe that this cumulative tightening will lead to
slower growth and, ultimately, to cyclical recessions in the
U.S., Europe and the UK later this year or next year."
** Intensifying China-U.S. tensions also weighed on market
sentiment.
** The White House backed legislation, introduced on Tuesday
by a dozen senators, to give the administration new powers to
ban Chinese-owned video app TikTok and other foreign-based
technologies if they pose national security threats.
** Hong Kong-listed tech giants dived 3.8%, with
Alibaba and Tencent down 3.3% and 2.5%,
respectively.
** Meanwhile, China said on Tuesday it will set up a new
financial regulatory body to consolidate oversight, which
analysts said was aimed at closing loopholes with multiple
agencies monitoring different aspects of trillions of dollars
worth of its financial services industry.
** The energy and banking sectors
weighed on the China A-shares index, losing 1.4% and 0.8%,
respectively.
** In Hong Kong, Chinese copper miner MMG Ltd tumbled as much as 6.9% as the company reported a 74% decline in
net profit for 2022. The Hang Seng materials index fell
2.9%.
(Reporting by Summer Zhen; Editing by Savio D'Souza)
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