Meanwhile, selloff pressure mounted after China once again imposed lockdown in several cities across the country and also ramped up COVID restrictions to fight a surge in fresh cases. Also weighing the sentiments was a private survey report showing that China's services sector shrank more than expected in October.
At closing bell, the benchmark Hang Seng Index stumbled 487.68 points, or 3.08%, to 15,339.49. The Hang Seng China Enterprises Index was down 184.52 points, or 3.45%, to 5,170.51.
Investors avoided risky assets following the US Federal Reserve's 75-basis-point rate hike and a statement from US Fed Chair Jerome Powell that indicated that the central bank's fight against inflation is far from over.
The Fed raised key interest rate by 75 basis points as widely expected. While the Fed left open the possibility it may raise rates in smaller increments in the future, it said its battle against inflation will require borrowing costs to rise further. Fed Chair Jerome Powell said it was "very premature" to discuss when the Fed might pause and that there was "some ground to cover" for the target federal funds rate to reach a "sufficiently restrictive" level that will slow inflation. "Fed Chair Jerome Powell's comment that the terminal rate will be higher than previously expected spooked the market.
Major central banks have embarked on some of the most aggressive round of rate rises in decades in a bid to curb red-hot inflation, risking a downturn in the global economy.
Chinese authorities imposed lockdowns on the district in Zhengzhou city where 600,000 people in the area surrounding the world's largest iPhone factory on Wednesday, as workers complained of disorderly Covid controls at the facility. As per reports that local authorities would "thoroughly disinfect" Foxconn's facilities, including employee dormitories, over the next three days. Workers quarantining at the factory would need to show seven days of negative tests before leaving for their hometowns.
ECONOMIC NEWS: The Hong Kong Monetary Authority today raised its base rate by 75 basis points to keep pace with the Fed rate hike.
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