China and Hong Kong Indexes Drift Lower and Extend Weekly Losses, PBOC Holds Loan Pri

Li Chen
20 Dec, 2024
Hong Kong

Stock market indexes in China and Hong Kong traded around the flatline amid a lack of catalysts. 

The Hang Seng index edged higher 0.1%, and the mainland-focused CSI 300 index decreased 0.5% in volatile trading, and benchmark indexes erased gains of the week to close down 1% and 0.1%, respectively. 

Investors have been on the back foot after Beijing's policymakers showed little urgency in implementing wide-ranging fiscal stimulus measures, announced with much fanfare in late September. 

The People's Bank of China held its short- and medium-term interest rates steady as officials promised looser monetary policy and more "proactive" fiscal measures. 

The loan prime rate for one year was held at 3.1%, and for five years at 3.6%, and both rates are at record lows following the latest reductions in October and July. 

Chinese leaders in early December announced plans to increase the 2025 budget deficit to a new record high of 4% to revive economic growth and stimulate consumption. 

However, those announcements have faced a wall of skepticism amid the central government's whopping debt load and few details of implementation plans in the imminent future. 

 

China Stock Movers 

The Hang Seng index increased 0.1% to 19,770.90, and the mainland-focused CSI 300 index decreased 0.5% to 3,926.58. 

Tencent Holdings Ld. jumped 3.3% to HK $428.60 after the company announced a test function on the WeChat-operated shopping platform to gift less than 10,000 yuan, or about $1.375. 

After the announcement, Tencent's leading competitors traded down. 

Alibaba Group Holding Ltd. decreased 3.3% to HK $80.25, JD.com fell 2.4% to HK $138.30, and Kuaishou Technology dropped 4.9% to HK $43.0.

CK Hutchison Holdings Ltd. declined 0.4% to HK $40.70 after local reports said that the company's Italian mobile telephony unit is investigated for the alleged tax avoidance while selling its assets for €3.4 billion to Cellnex Telecom. 

Three newly listed companies on the Hong Kong Stock Exchange and Shenzhen Stock Exchange jumped on the first day of trading. 

Xiaocaiyuan International rose 4% to HK$8.80, and BBK Test Systems jumped 155% to 98.61 yuan, and Zhejiang Lanyu Digital Technology surged 250% to 84.99 yuan in Shenzhen.