The Hang Seng Index fell 0.43 points to 16,645.98 at the close. The Hang Seng Tech Index also added 0.2 per cent, while the Shanghai Composite Index retreated 0.4 per cent.

Hotpot restaurant operator Haidilao International Holding dropped 3.9 per cent to HK$13.64 after Morgan Stanley slashed the price target for the stock by 23 per cent, citing stiffer competition and weak consumer spending.

Limiting the losses on the broader market, CNOOC advanced 2.8 per cent to HK$13.36 and PetroChina added 2.7 per cent to HK$5.37 after crude oil futures rose above US$73 a barrel for the biggest gain in almost seven weeks.

Technology stocks led the declines in the US overnight and gold futures trended lower after the Fed dampened bets on aggressive cuts in borrowing costs, while the US dollar index rose to a three-week high. The focus will now be on the US jobless claims and unemployment data due on Thursday and Friday.

“The release of FOMC minutes delivered an unwelcome update that appeared both hawkish and cautious on the macroeconomic front,” said Stephen Innes, a managing partner at SPI Asset Management. “The beginning of 2024 has seen a slight recalibration of market-based interest rate cut expectations. The macroeconomic outlook is best characterised by a high degree of uncertainty.”

Hong Kong’s MPF reports first gain since 2020, adding US$4.8 billion in value

Hong Kong stocks have extended their weakness into the new year, as worries about China’s growth outlook lingers and overseas traders tamp down their expectations about an imminent rate cut in the US. The Hang Seng Index fell 2.4 per cent over the past two trading days after a 14 per cent decline last year.

Meanwhile, the Caixin purchasing managers’ index of the services industry rose to 52.9 in December from 51.5 in the previous month, remaining in expansionary territory for 12 months in a row.

Other major Asian markets fell. Japan’s Nikkei 225 slid 0.5 per cent as the market started trading for the first time in 2024. South Korea’s Kospi retreated 0.8 per cent, while Australia’s S&P/ASX 200 lost 0.4 per cent.