As the Federal Reserve violently raised interest rates by 75 basis points, after a night of panic in US stocks, Asia-Pacific stock markets also directly "emo".

As of early trading, the Nikkei 225 index fell 1.05% to 27026.65, South Korea's Seoul Composite Index fell 1.52% to 2311.48, and Taiwan's weighted index fell 1.50% to 14208.11.

The Hong Kong and A-share markets opened lower. However, A-share concussion then rebounded. As of press time, the Prev index fell 0.16% to 3112.19 points, the gem index fell 0.24%, and the Shenzhen Index fell 0.26%.

As for Hong Kong stocks, the Hang Seng Index once fell directly below 18000 points, a new low in nearly 11 years, while the Hang Seng Technology Index once fell 3.5% to as low as 3606.66 points. However, as of press time, the decline of the Hang Seng Index and the Hang Seng Technology Index has narrowed.

Large-scale technology stocks are also falling. Trip.com fell by more than 5%, JD.com, Meituan, BABA and Baidu, Inc. all fell by more than 3%, and NetEase, Inc, Bilibili Inc., Tencent and XIAOMI all fell. On the disk, gambling, catering, car-building new forces and other collective setbacks.

Using "labor pains" to objectively evaluate the current Hong Kong stock market is more ideal and objective. The reason is very simple: the financial market is related to the luck of the country, the luck of the country is upward, and the stock market is bound to rise in the long run, but it will fluctuate greatly under the influence of various factors in the short term, that is, the so-called crisis that has occurred before.

As the most important window for China's opening up to the outside world, the economic value and strategic significance of Hong Kong's financial market are extremely important. therefore, although Hong Kong stocks are indeed in labor pains, we should not lose hope for them. Maybe it will be a little longer, and things will get better next year when the Fed enters the end of raising interest rates.

Behind the storm of raising interest rates

Last night was another sleepless night, with global markets keeping a close eye on the Fed.

Until the wee hours of the morning, when the boots landed, the US Federal Reserve announced that it would raise interest rates by 75 basis points, raising the target range of the federal funds rate to between 3.00% and 3.25%, in line with market expectations. This is the fifth time that the Federal Reserve has raised interest rates this year and the third consecutive 75 basis points, the largest intensive rate hike since 1981.

To thisMr Powell said the fed was firmly committed to keeping us inflation down to 2 per cent and would raise interest rates by another 100 per cent by 125bp in 2022.

According to CME Fed Watch, the probability of the Fed raising interest rates by 50 basis points to 3.50 per cent between 3.75 per cent and 3.50 per cent in November is 36.5 per cent, the probability of raising interest rates by 75 basis points is 63.5 per cent, and the probability of raising interest rates by 100bp is 0 per cent. By December, the probability of raising interest rates by 100bp is 33.7 per cent, the probability of raising 125bp is 61.5 per cent, and the probability of raising rates by 150bp is 4.7 per cent.

At this point, a storm of interest rate hikes centered around the Federal Reserve has begun, and the global interest rate hike race has begun. In addition to Sweden, Japan, the United Kingdom and other foreign countries, today, Hong Kong and Macao have also kept pace with the Fed's rate hike.

Thursday,The Hong Kong Monetary Authority of China raised its benchmark interest rate by 75 basis points to 3.5%, the fifth consecutive increase.

Investors are closely watching whether Hong Kong's biggest banks will follow the HKMA and raise prime rates for the first time since 2018. So far, HSBC, Standard Chartered and other banks have not acted.

Higher interest rates pose additional risks to economic growth, and Hong Kong has cut its growth forecast twice this year because of the global recession.

Hong Kong's monetary policy needs to be pegged to the US dollar, and the Fed's aggressive policy this year has sparked debate about the sustainability of Hong Kong's linked exchange rate system.

In July, the Chief Executive of the Hong Kong Monetary Authority, Mr Yu Wai-man, wrote on the official website that in the nearly 40 years since its implementation, the linked exchange rate system has gone through many economic cycles and has been effective, and is the cornerstone of Hong Kong's financial and monetary stability.

On the Fed's interest rate hike, Yu Weiwen said that as the Fed will continue to actively raise interest rates to curb high inflation, the pace of future interest rate increases depends on the economic outlook and data. He expected banks in Hong Kong to raise deposit and lending rates, including the best lending rate, and urged members of the public to make preparations before buying their own homes or borrowing.

The Macao Monetary Authority also announced today that it will raise the base rate of the discount window by 75 basis points to 3.50%.. According to reports, in view of the peg between the patacas and the Hong Kong dollar, changes in policy interest rates between the two places must be basically the same in order to maintain the effective operation of the linked exchange rate system between Hong Kong and Macao. As a result, the Macao HKMA adjusts its base interest rate synchronously with the Hong Kong HKMA. Under the linked exchange rate system where the Hong Kong dollar is pegged to the US dollar, the interest rate adjustment in Hong Kong is based on the US Federal Reserve's increase of 75 basis points in the target range of the federal funds rate on September 21 (US time).

How is the future of Hong Kong stocks?

JPMorgan Chase & Co's chief Asia and China equity strategist said that the overall valuation of Chinese stocks is very low and is very optimistic about the future performance of China's A-share and Hong Kong stock markets. The valuation level of Chinese stocks as a whole is very low, and JPMorgan Chase & Co is very optimistic about the future performance of China's A-share and Hong Kong stock markets. From the beginning of the year to the present, despite the poor performance of these two markets, global investors remain structurally bullish. In the future, JPMorgan Chase & Co is more optimistic about high-quality stocks, that is, high ROA (return on assets), high ROE (return on net assets) stocks, mainly from the consumer industry.

A few days ago, the Chief Executive of the Hong Kong Special Administrative region, Li Jiachao, said that Hong Kong is the top financing center in the world. By the end of August, 78 emerging and innovative enterprises or biotechnology companies had listed in Hong Kong under the new system, raising a total of more than 580 billion yuan. In the next step, the SFC and HKEx will strive to put forward specific proposals as soon as possible to amend the main Board listing Ordinance to meet the financing needs of advanced technology enterprises with large scale but not yet supported by profits or performance.

He pointed out that the "connectivity" between the capital markets of Hong Kong and the mainland has been continuously strengthened in the past few years, including the launch of the Shanghai-Shenzhen-Hong Kong Stock Connect and the Bond Link. In July this year, ETF (Exchange traded Fund) was also included in the Shanghai-Shenzhen-Hong Kong Stock Connect. In the future, Hong Kong will discuss with the mainland to further expand the scope of the connectivity plan and promote financial linkage in the Greater Bay area. Li Jiachao also said that in order to promote the "interconnection" of the insurance market, Hong Kong's insurance industry is striving to set up insurance after-sales service centers in cities in the Greater Bay area as soon as possible to provide a full range of services to residents in the Greater Bay area who hold Hong Kong insurance policies.