Hong Kong Stocks Rebounded After PBoC Unexpectedly Lowered Rates

Li Chen
22 Jul, 2024
Hong Kong

Market indexes in Hong Kong advanced but in Shanghai declined amid a lack of strong policy support for the revival of long-term economic growth after the ending of the third plenary session of Communist Party leaders. 

The Hang Seng index gained 0.7%, and the CSI 300 index, tracking the largest stocks on the mainland, declined 1%. 

The People's Bank of China unexpectedly lowered its seven-day reverse repo rate and loan prime rates as the central bank facilitated lending to corporations to revive economic growth. 

The move comes after the policymakers vowed to offer more support to the economy during the four-day Third Plenum last week. 

The one-year loan prime rate was lowered by 10 basis points to 3.35%, and the five-year rate was trimmed by the same amount to 3.85%. 

Both rates dropped to new lows as the central bank reacted to a weak second quarter GDP growth rate and mixed economic data for June released a few days ago. 

The central bank also lowered the seven-day reverse repo rate to 1.7% from 1.8%. 

 

China Stock Movers 

The Hang Seng index rebounded after falling nearly 5% in the previous week, its largest weekly loss in nearly two months. 

The Hang Seng index increased 0.7% to 17,539.38 and the CSI 300 index decreased 1% to 3,502.10. 

Travel-related stocks were focused on the expected surge in demand ahead of the summer travel in a few weeks. 

Trip.com increased 4% to HK $358.0, and Tongcheng Travel Holdings declined 0.3% to HK $13.72. 

Technology stocks were also among the most actively traded stocks in Monday's trading. 

Tencent Holdings jumped 2.4% to HK $372.60, Alibaba Group advanced 1% to HK $74.55, Baidu gained 11.1% to HK $89.15. 

Hebei Keli Automobile Equipment, an automobile glassmaker, soared more than 110% on the first day of its trading to 65.32 yuan after the company priced its initial public offering at 30 yuan and raised 510 million yuan.