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Chinese stocks lead declines in Asia-Pacific; South Korea hikes interest rates

SINGAPORE — Chinese stocks led declines among major Asia-Pacific markets on Thursday, as U.S. markets surged to record highs overnight. Meanwhile, South Korea’s central bank hiked interest rates.

China’s Shenzhen component fell 1.25%, while the Shanghai composite declined 0.50%.

Hong Kong’s Hang Seng index tumbled 1.44%. Alibaba was down 1.77%, and Meituan tumbled 1.94%. Apple supplier AAC Tech dived 11%.

South Korea’s central bank raised interest rates for the first time in nearly three years, making it the first major economy to do so in the pandemic era. The Bank of Korea raised its rate by 25 basis points to 0.75%.

South Korea’s Kospi fell 0.79% while the Korean won weakened on that news to trade at 1,169.77 Korean won per dollar.

“The virus situation in Korea has deteriorated since the central bank’s July meeting, when it gave strong signals that tightening was imminent,” Capital Economics wrote in a note before the announcement.

“However, the economy has become increasingly resilient to outbreaks, as businesses have learned to live with the virus,” it said, adding that surging household debt and rising home prices are adding to financial stability issues.

In other markets, Japan’s Nikkei 225 was trading flat, while the Topix was slightly below the flatline.

Meanwhile, Australia’s new daily Covid cases shot up to more than 1,000 on Thursday for the first time during the pandemic, according to Reuters. Two major hospitals in Sydney had to set up emergency outdoor tents to cope with the surge in patients.

Australia’s S&P/ASX 200 fell 0.44% on Thursday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.66%.

U.S. stocks climbed again overnight. The Dow Jones Industrial Average rose 39.24 points, or 0.1%, to 35,405.50. The S&P 500 added 0.2% to a new closing high of 4,496.19. The Nasdaq Composite gained 0.1% to 15,041.86, also a new closing high.

The U.S. dollar index, which tracks the greenback against a basket of its peers, dropped to 92.901, off levels above 93 earlier this week.

The Japanese yen traded at 109.95, strengthening from above 110 in the previous session. The Australian dollar changed hands at $0.7259, falling from levels above $0.726 in the previous session.

Oil prices fell in the morning of Asia hours. International benchmark Brent crude futures declined 0.53% to $71.87 per barrel. U.S. crude futures fell 0.73% to $67.86.

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