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Hong Kong stocks follow Wall Street lower amid investor caution

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[HONG KONG] Hong Kong stocks fell the most in nearly two weeks on Wednesday, with market sentiment dampened by weakness on Wall Street and in China.

Investors also remained nervous given the US election next month, the Federal Reserve's policy meeting in December, and over the health of China's economy.

The Hang Seng index fell 1.0 per cent, to 23,325.43, while the China Enterprises Index lost 1.4 per cent, to 9,698.85 points.

Morgan Stanley said that China's property boom, and the recent tightening, would have a negative impact on the economy.

"While we are less concerned about a hard-landing scenario in the near term, we believe the recent housing boom has been causing deterioration in China's structural fault lines," Morgan Stanley wrote. "This echoes our long-standing view that China's growth trajectory beyond the near term will be weighed down by structural issues."

Nearly all sectors fell, with financial shares leading the decline.

Great Wall Motor tumbled 12 per cent on Nomura's downgrade after its third-quarter results.