Morgan Stanley Says Hong Kong's Equity Selloff Is Far From Over

Rising interest rates, a weaker yuan and worsening U.S.-China trade relations are combining to threaten Asia’s economic growth and corporate profits, according to Morgan Stanley. While the strategists cut their targets on six other gauges in the region, Hong Kong looks especially vulnerable due to links with U.S. monetary policy and its companies’ reliance on China for earnings. “We think the Hang Seng index is at risk of a further sharp drawdown near term,” strategists led by Jonathan Garner wrote in a note Wednesday.