China, Hong Kong markets flatline ahead of Fed decision on rates

Hong Kong shares hit a two-month low Wednesday on weak turnover as investors continued to wait on the sidelines until next week’s US interest rate decision, while in China the markets drifted sideways eking out small gains for the day.

Trading was thin in both markets with Chinese monthly consumer price inflation data coming in slightly higher than expected, at 1.5 per cent year on year growth for November. The producer price index fell lower than expected to 5.9 per cent over the same time frame, according to the National Bureau of Statistics data, extending a 45-month decline.

The Hang Seng index slipped 0.46 per cent to 21,803.76 and the H-share index fell 1.06 per cent to 9,558.76, with a total market turnover of HK$66.5 billion. The Shanghai Composite closed just 0.07 per cent higher at 3,472.44 and the CSI 300 rose 0.36 per cent to 3,635.94 while the Shenzhen Composite dropped 0.32 per cent to 2,214.21.

In a move that further underscores the severity of China’s recent clampdown on securities sector corruption and insider trading, Yao Gang was removed from his post as deputy chairman of China Securities Regulatory Commission, China’s State Council announced after the markets closed.

Yao was among dozens of high-ranking officials and senior executives at brokerages and fund houses rounded up in recent months.

The brokerage sector tracked the wider market lower on Wednesday, with Citic Securities off 0.23 per cent at HK$17.46 and Haitong Securities 1.39 per cent weaker at HK$12.78. A slight rise in crude oil prices failed to translate into concerted gains for the sector, with Petrochina off 1.32 per cent at HK$5.23 and CNOOC up 1.08 per cent at HK$8.39.