Hang Seng Index Book Best Weekly Gains In Five Months, PBoC Holds Rates Steady

Li Chen
20 Sep, 2024
Hong Kong

Stock market indexes in Hong Kong headed higher, but they declined in Shanghai after the People's Bank of China in a surprise move kept its short- and medium-term rates unchanged. 

The Hang Seng index soared 1.5% and extended this week's gains to over 5%, the best weekly gain since April 26. 

The CSI 300 index edged down 0.3% and extended weekly losses to a fraction in a holiday-shortened week as market sentiment remained weak.

The central bank in Beijing, in a surprise move, announced its plan to hold rates steady despite weak economic momentum and a stable exchange rate. 

Investors were widely anticipating a rate cut following a jumbo-sized 50 basis points cut by the U.S. Federal Reserve on Wednesday. 

The People's Bank of China held steady its one-year loan prime rate at 3.35% and five-year loan prime rate at 3.85%. 

Economists still held out for the central bank to lower rates in the months ahead, following the latest string of weak retail sales, industrial output growth, and falling investment in the property sector. 

In other economic news in Asia, the Bank of Japan held its short-term lending rate unrevised between 0.25% and 1.0%, meeting market expectations. 

 

China Stock Movers 

The Hang Seng Index jumped 1.5% to 18,275.14, and the CSI 300 index fell 0.3% to 3,187.38. 

Tech stocks in Hong Kong jumped, tracking a higher closing in New York in overnight trading. 

Alibaba Group gained 2.5% to HK $87.80, Tencent Holdings advanced 0.3% to HK $392.20, JD.com jumped 0.5% to HK $112.30, and Baidu added 0.2% to HK $85.45.

Banks were in focus after the People's Bank of China, in a surprise move, held steady its short- and medium-term loan rates. 

Bank of China added 1.1% to HK $3.49, Agriculture Bank of China jumped 1.9% to HK$3.66, and China Construction Bank increased 1% to HK $5.62.

Mainland-focused residential property sectors were in focus for the second day in a row, after the HKMA lowered its base rate and the People's Bank of China held steady interest rates. 

China Vanke jumped 1% to HK $4.41, China Resources Land gained 2.4% to HK $21.40, and Longfor Group advanced 1.9% to HK $8.84. 

Zhejiang Zhongxin Environmental Protection Technology Group soared 55% to 40.08 yuan on its first day of trading in Shanghai. 

The food packaging company priced its public offering at 26.80 yuan per share and raised 677 million in its initial public offering.