Hong Kong stocks fell at the start of Friday's trading session after U.S. producer price index data for August signaled a high possibility of a Federal Reserve rate hike, amid rising oil prices and Treasury yields.
The Hang Seng Index shed 0.9%, or 236 points, to 24,718.15. The Hang Seng China Enterprises Index also lost 0.9%, or about 78 points, to 8,197.09.
The PPI reading, an indicator of wholesale inflation, came in at 0.4% for August, in line with expectations, but translated to 5.4% annually, above the Fed's 2% goal. The awaited release of the consumer price index data is expected to factor into the Fed's decision on inflation at next week's meeting.
Meanwhile, ongoing geopolitical tensions in the Middle East have pushed global crude benchmarks above $100 a barrel, further fueling fears that mounting tensions between the U.S. and Iran could stymie global oil supply.
The oil price surge has driven a sharp jump in Treasury yields, with 30-year notes soaring to their highest levels in more than 19 years, 10-year notes hitting a three-year high, and two-year notes rising to over two-year highs, piling on inflation worries.