Hong Kong shares down as investors eye Fed meeting, China economy

Sept 19 (Reuters) – Hong Kong stocks dipped on Tuesday as traders awaited the Federal Reserve’s policy meeting this week and as recent China economic data kept risk appetite subdued, defying Wall Street’s bullish lead.

The Hang Seng index fell 0.4 percent, to 28,051.41, while the China Enterprises Index lost 0.6 percent, to 11,125.71 points. Most sectors fell, led by energy and resource shares.

At a two-day meeting beginning later on Tuesday, the Fed is expected to take another step toward policy normalisation and announce plans to begin unwinding its $4.2 trillion portfolio of Treasuries and mortgage-backed securities.

China Investment Securities (HK) said it expects the Fed to “reduce its balance sheet gradually, thus, the initial impact on the capital markets would be limited”.

Caution reigned in Hong Kong’s equity market, after the Hang Seng’s 28 percent surge this year, even as the Dow Jones Industrial Average and the S&P 500 closed at record highs again on Monday.

Risk appetite has also been suppressed by a mixed bag of China economic data recently, with signs of a slowdown in some parts of the economy, such as fixed-asset investment, but optimism seen in areas such as stronger-than-expected lending data. (Reporting by the Shanghai Newsroom; Editing by Sam Holmes)

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