PBoC Lowers Loan Prime Rates, Hang Seng Index Extends Weekly Losses

Li Chen
21 Oct, 2024
Hong Kong

Stock market indexes in Hong Kong and China traded down amid growing worry that fiscal stimulus measures are likely to fall short of market expectations. 

The Hang Seng index dropped 1.5% and the CSI 300 index advanced 0.3% in volatile trading after the central bank lowered its key lending rates over the weekend. 

The People's Bank of China lowered its loan prime rate for one year and five years by 25 basis points to 3.1% and 3.6%, respectively. 

The move was widely anticipated, but the latest monetary step is going to provide little fillip to the property market. 

Investors shifted their focus to a meeting of the National People's Congress later in the week. 

The docile parliament is widely expected to approve the increase in government spending and borrowing limit as China's finance ministry and the central bank prepare to inject more money into the economy through the banking system. 

The China market rally since mid-September has been losing steam as investors dial down their expectations of additional fiscal stimulus to revive the property market and consumer confidence. 

Investors are also eyeing the release of earnings from leading insurance and technology companies this week, including results from Ping An Insurance, Hong Kong Stock Exchanges and Clearing, and Sands China. 

China Stock Movers 

The Hang Seng index decreased 1.5% to 20,492.13, and the CSI 300 index advanced 0.5% to 20,492.13. 

Ping An declined 1.9% to HK $49.0, Sands China Ltd. decreased 3.4% to HK $18.14, and Galaxy Entertainment dropped 3.4% to HK $33.80. 

Tencent Holdings decreased 2.5% to HK $419.80, Alibaba Group fell 3.4% to HK $96.95, and JD.com Inc. dropped 2.8% to HK $154.30.