But while most traders from New York to most of Asia have taken a step back, Hong Kong and Shanghai have pressed on, with the HSI now setting its sights on an all-time high of 31,958.41 hit in October 2007. The financial hub has been boosted by increased flows of cash from traders in Shanghai and Shenzhen looking to pick up stocks at a relative discount to those at home, while analysts pointed to low borrowing costs on interbank markets.
Energy firms have been among the top performers with oil prices rallying to around three-year highs, while property plays have also rallied as interest rates in the city remain low, despite increases by the Federal Reserve - Hong Kong's monetary policy is linked to the US via the currency peg. However, with markets globally enjoying healthy gains in recent weeks there were warnings of a possible retreat.
"It's better to take some chips off the table - markets do look a little frothy," Mikio Kumada, a Hong Kong-based global strategist at LGT Capital Partners, told Bloomberg TV. "Eventually there will be a sell off or a correction that will offer better opportunities."
Among the best performers Thursday, AAC technologies jumped 4.42 percent to HK$148.70, HSBC piled on 2.38 percent to HK$84.05, and PetroChina gained 1.03 percent to HK$5.88. Wharf Real Estate rallied 2.65 percent to HK$54.20 and Hang Lung Properties was 2.50 percent higher at HK$20.50.
However, Tencent slipped 2.50 percent to HK$429.40, Hong Kong Exchanges and Clearing dropped 1.25 percent to HK$268.40 and Hang Seng Bank eased 0.83 percent to HK$190.50. Banks were higher in Shanghai. Banking giant ICBC gained 0.81 percent to 6.21 yuan while Bank of China climbed 1.49 percent to 4.09 yuan. But liquor makers took profits following recent gains.