HONG KONG (NewsRise) -- Hong Kong shares reversed early gains to end lower Thursday, as mounting concerns about a looming Federal Reserve rate increase overshadowed optimism in the wake of Donald Trump's address to U.S. lawmakers.
The Hang Seng Index slipped 0.2% to 23,728.07. The gauge rose as much as 1.3% earlier today as U.S. indexes rose to fresh records overnight after Trump adopted a conciliatory tone and measured approach in his speech. Developers were to blame for the turnaround, with a gauge of real estate companies listed in the city retreating 0.7% following hawkish comments from a clutch of Fed officials. Sun Hung Kai Properties shed 1.1% to HK$114.30 and Cheung Kong Property Holdings fell 1.6% to HK$52.30.
The rise in U.S. bond yields, which saw returns on the two-year Treasury note reach its highest since 2009 on Wednesday, came after Fed Governor Lael Brainard joined New York Fed President William Dudley and San Francisco Fed President John Williams this week to suggest a rate increase was warranted. Markets also await comments from Fed Chair Janet Yellen Friday.
The U.S. central bank, which raised rates for the second time in almost a decade last December, will review policy on March 14 -15.
A rate hike "is certainly looking more and more likely, with the interest rate markets increasing its implied probability of a lift in the fed funds rate from around 20% in early February to currently sit close to a 70% probability," Chris Weston, market strategist at IG Markets, wrote in a note.
The Hang Seng index, which rose over 6% in January and almost 2% in February, has fallen in five of the last six days.
"Hong Kong markets are in a short term phase of consolidation and profit taking," said Linus Yip, strategist at First Shanghai Securities. "U.S. monetary policy concerns may add to the downside pressure and a move below 23,700 levels will lead to additional selling."
In mainland markets, the Shanghai Composite and the Shenzhen benchmark fell at least 0.5% ahead of the start of China's annual parliament session. The onshore traded yuan slipped less than 0.1% to 6.881.
The Nikkei Asia300 index was up 0.1% at 1,131.85, also paring some early gains.
HSBC Holdings rose 1% to HK$63.55 as the increase in U.S. bond yields lifted global banks.
Geely Automobile Holdings fell 1.1% to HK$10.68 amid broad market losses. A unit of Ninghai Zhidou Electric Vehicles, backed by Geely, was given approval for an electric vehicle manufacturing project by China's state planner, Reuters reported.
C C Land Holdings fell 1.3%. Late Wednesday, the property company said it will buy London's Leadenall building for 1.15 billion pounds ($1.4 billion).
Television Broadcasts ended 1.6% lower at HK$33.75. The company said Hong Kong's Securities and Futures Commission has given TLG, which has shown interest in buying a 29.9% stake in Television Broadcasts, time until next Tuesday to provide more information relating to its proposal.
ZTE fell 1.3% to HK$12.54. The telecoms equipment maker is working with T-Mobile US and AT&T on car and driving technologies, South China Morning Post reported, citing ZTE Chief Information Officer Jane Chen.
--V. Phani Kumar and Nimesh Vora