After a US$1.3 trillion rout, analysts predict more pain in store for Hong Kong’s stock market amid rate increases

The slump in Hong Kong stocks to more than a decade-low this week may have further to go as investors in Asia’s third-largest market brace for the fallout from higher borrowing costs in the coming weeks or months.

A succession of challenges, from China’s economic inertia and tech crackdown to Covid-19 border closures and local currency depreciation, have punished investors seeking to bottom-fish for values after a US$1.3 trillion rout this year. Now, the spectre of two more potential rate increases this year could make equity returns even harder to come by.