China and Hong Kong Markets Dip Amid Profit Booking and Federal Reserve Cues

Equity benchmarks in China and Hong Kong fell as investors cashed profits following a recent rally and awaited the U.S. Federal Reserve meeting. Market optimism was linked to the U.S.-China trade truce and a weaker dollar. The Shanghai Composite and Hang Seng indices closed slightly lower.

Equity benchmarks in China and Hong Kong experienced declines on Tuesday with investors taking profits following a strong rally and ahead of a decisive U.S. Federal Reserve meeting that might shed light on future policy directions.

Specifically, the Shanghai Composite index dropped marginally by 0.02% to 3,727.29, while the blue-chip CSI300 index decreased by 0.38%. Hong Kong's Hang Seng index also fell by 0.3%, marking its fourth consecutive decline.

Analysts highlighted that market optimism was bolstered by the extension of the U.S.-China trade truce and lower dollar expectations, leading to increased inflows. However, some investors opted to reduce their risk exposure pre-Federal Reserve meeting and amidst geopolitical uncertainties.

(With inputs from agencies.)