Market Updates
PBoC Holds Rates Steady; Weak Tech Stocks Drag Stock Indexes Lower
Li Chen
20 Aug, 2024
Hong Kong
Market indexes in Shanghai and Hong Kong edged lower, and the central bank held steady two key lending rates.
The Hang Seng index declined 0.4% and the mainland-focused CSI 300 index dropped 0.9%.
The People's Bank of China held steady 1-year loan prime rate at 3.35% and the 5-year loan prime rate at 3.85%.
The one-year loan rate is used as a reference rate for new and outstanding loans, and the five-year loan rate is seen as a benchmark for mortgage loans.
Market sentiment was weak as investors debated the future U.S. rate path because Hong Kong rates are tied to the U.S. rates to keep the currency peg.
Investors have been cautious after a batch of mixed economic reports last week, after new home prices declined for the 13th month in a row in July and fell at the fastest pace in several years.
Moreover, the property market shows little signs of stabilizing, and local government announcements to support the completion of unfinished projects did little to arrest price declines or increase property transactions.
China Stock Movers
The Hang Seng index decreased 0.4% to 17,503.90 and the CSI 300 index dropped 0.9% to 3,327.35.
Kaisa Group Holdings dropped 4.5% to HK $0.10 after the company urged lenders to accept its restructuring plan and avoid bankruptcy.
Tech stocks traded down in Hong Kong amid ongoing worries of earnings growth, despite JD.com reporting a near doubling of earnings in the second quarter.
JD.com decreased 0.3% to HK $112.10, Alibaba Group fell 1.5% to HK $80.20, Baidu added 0.7% to HK $86.45, and Haier Smart Home dropped 4.5% to HK $22.50.
Li Auto added 1.2% to HK $81.60, Xpeng fell 2% to HK $27.55, and BYD added 0.02% to HK 235.47.
TYK Medicines jumped 8% to HK $13.05, and the biopharmaceutical company completed its initial public offering at HK $12 per share and raised HK $579 million.
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