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Wednesday, September 25, 2024

Tencent and AIA keep pace with Hong Kong market downturn, Hang Seng hovers around $15,000 as Chinese banks defy easing measures and maintain interest rates

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Hong Kong stock The stock fell toward a 15-month low, racking up losses from a three-week plunge after China left lending rates linked to mortgages unchanged, disappointing investors who had bet on measures to support the economy.

The Hang Seng Index fell 2% to 15,004.77 at the local noon trading break, after dipping below the 15,000 floor several times during the session. This level was the lowest since October 31, 2022. The tech index fell 2.5%, and the Shanghai Composite Index fell 0.9%, the lowest level since April 2020.

Tencent fell 2.8% to HK$263.60, Meituan fell 5% to HK$65.20 and Baidu fell 3.5% to HK$95.75. Hanso Pharma fell 6.5% to HK$11.56, while Wuxi Biologics fell 4.1% to HK$27.20.

Sportswear maker Li Ning fell 5.7% to HK$15.26, while dairy product maker Mengniu fell 4.3% to HK$16.52. Among financial stocks, insurance company AIA fell 1.7% to HK$59.45, and HSBC fell 0.8% to HK$58.20.

According to the People’s Bank of China, the one-year loan prime rate was set monthly at 3.45% on Monday, unchanged from August last year. The five-year interest rate, which is a benchmark for mortgage lending, will remain unchanged at 4.2%, unchanged since it was last lowered in June.

“Why is China in decline again?” Embattled Hong Kong-based fund asks BofA to explain stock losses

“This is a capitulation,” said Dickie Wong, executive director of Kingston Securities. “No matter what the central bank does, the fact remains that foreign investors have no confidence in this market right now.”

The Hang Seng index has fallen more than 10% this year, its worst start since 2016, as economic data fell short of market expectations and the Chinese government steadfastly refrained from imposing stimulus measures.

02:31

China’s GDP: Beijing’s long to-do list for economic growth in 2024

China’s GDP: Beijing’s long to-do list for economic growth in 2024

Economists at Barclays, including Jiang Zhang, said in a note to clients that the Chinese government is unlikely to launch any major easing measures this year to boost confidence or counter deflation risks, so policy It is likely that developments will continue to be lower than market expectations. weekend. They added that a prolonged and significant contraction in real estate investment alone would hamper the recovery.

Foreign investors sold 31.5 billion yuan (US$4.4 billion) worth of mainland-listed stocks in 2024, adding to an unprecedented total of US$26.2 billion in sales over the past five months.

Other major Asian markets mostly rose, matching record levels in the U.S. market last week. Japan’s Nikkei Stock Average rose 1.3%, Australia’s S&P/ASX 200 index rose 0.7%, while South Korea’s Kospi index was little changed.



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