The Hong Kong stock market has finished lower in back-to-back trading days, dropping more than 560 points or 2 percent along the way. The Hang Seng Index now rests just above the 26,790-point plateau although it may stop the bleeding on Wednesday.
The global forecast for the Asian markets suggests mild upside ahead of the Federal Reserve's monetary policy announcement later today. The European markets were down and the U.S. bourses were up slightly and the Asian markets are tipped to follow the latter lead.
The Hang Seng finished sharply lower on Tuesday following losses from the financials, properties, casinos and oil and insurance companies.
For the day, the index plunged 334.31 points or 1.23 percent to finish at 26,790.24 after trading between 26,694.37 and 26,951.84.
Among the actives, China Petroleum and Chemical (Sinopec) plummeted 3.57 percent, while Techtronic Industries plunged 3.29 percent, WH Group tumbled 2.54 percent, AAC Technologies skidded 2.18 percent, China Life Insurance retreated 1.85 percent, Galaxy Entertainment and Hengan International both declined 1.80 percent, AIA Group and BOC Hong Kong both dropped 1.63 percent, China Mobile sank 1.57 percent, Ping An Insurance shed 1.32 percent, Industrial and Commercial Bank of China lost 1.30 percent, Sands China fell 1.05 percent, Hong Kong & China Gas slid 0.64 percent, CNOOC advanced 0.63 percent, CSPC Pharmaceutical dipped 0.39 percent, CITIC added 0.20 percent and New World Development eased 0.20 percent.
The lead from Wall Street is cautiously optimistic as stocks showed a lack of direction Tuesday ahead of the Fed's announcement. The major averages spent most of the session bouncing back and forth across the unchanged line before endling slightly higher.
The Dow added 33.98 points or 0.13 percent to 27,110.80, while the NASDAQ gained 32.47 points or 0.40 percent to 8,186.02 and the S&P rose 7.74 points or 0.26 percent to 3,005.70.
The choppy trading came as traders seemed reluctant to make significant moves ahead of the monetary policy decision. The Fed is widely expected to lower interest rates by another 25 basis points, with traders likely to pay closer attention to the accompanying statement for clues about the long-term outlook for rates.
Uncertainty about the U.S. response to the recent attacks on Saudi Arabian oil facilities also kept some traders on the sidelines. President Donald Trump has indicated the U.S. is prepared to respond militarily but has stopped short of definitively blaming Iran for the attacks.
In economic news, the Fed said industrial output rebounded much more than anticipated in August, while the National Association of Home Builders noted an unexpected improvement in U.S. homebuilder confidence in September.
Crude oil prices retreated on Tuesday after having skyrocketed in the previous session following the drone attack on Saudi Arabian oil facilities. West Texas Intermediate Crude oil futures for October plunged $3.56 or 5.7 percent to $59.34 a barrel.
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