HK Stock Market Move | Hong Kong banking stocks fell in late trading as expectations of Fed rate hikes continued to heat up; the market may focus on Hong Kong banks' net interest margin performance.

Hong Kong banking stocks fell in late trading. As of press time, BOC HONG KONG (02388) fell 4.47% to HK$51.25; STANCHART (02888) fell 3.41% to HK$238.2; HSBC HOLDINGS (00005) fell 2.97% to HK$160; DAHSING BANKING (02356) fell 2.52% to HK$14.34. On the news front, on September 15, the 10-year U.S. Treasury yield rose to 5.031%, the highest level since 2007. It is reported that as the August inflation rate remained significantly above the Federal Reserve's 2% target, market expectations for a 25 basis point rate hike by the Fed further intensified. According to the CME "FedWatch" tool, the market currently expects the probability of the Fed raising rates by 25 basis points at this meeting to exceed 92%. Huatai pointed out that in August, the Hong Kong banking index fell first and then rose. After the rapid rise in dividend trades last month, funds took profits early in the month. Combined with disturbances to sentiment from the taxation of returns on insurance purchases in Hong Kong by mainland residents, the scale of HSBC HOLDINGS' restart of buybacks falling short of market expectations, and the decline in the 1M Hibor rate, the banking sector once significantly underperformed the Hang Seng Index. Since mid-August, sentiment has eased somewhat. The subsequent net interest margin performance of Hong Kong banks will depend on the pace of asset and liability repricing and expectations of Fed rate hikes.