PBoC Holds Reference Rates Steady, Hong Kong Tech Stocks Waver

Li Chen
20 May, 2026
Hong Kong

The movements in the bond market dominated market sentiment in stock trading amid persistent inflation worry rooted in the prolonged Middle East conflict. 

The Hang Seng Index decreased 0.6%, and the mainland-focused CSI 300 Index eased 0.3%, as the yield on the U.S. Treasury notes reached the highest since 2007. 

The yield on the 10-year U.S. Treasury notes advanced to 4.66% as investors reacted to elevated energy product prices and prolonged closure of the Strait of Hormuz. 

 

PBoC Holds Rates Steady Amid Weakening Economic Data

The People's Bank of China held steady its reference rates for most consumer loans and property loans for the twelfth month in a row. 

The central bank left unrevised the one-year loan prime rate at 3.0% and the five-year LPR rate at 3.5%, underscoring the cautious stance of the policymakers despite the rising inflationary pressures rooted in the supply disruptions through the Strait of Hormuz. 

The policymakers held reference rates amid weakening economic data, as in April retail sales rose at the weakest pace in four years, and industrial output rose at the slowest pace since 2023.

 

China Indexes and Stocks 

The Hang Seng Index decreased 0.6% to 25,655.44, and the mainland-focused CSI 300 Index declined 0.3% to 4,839.16. 

Technology and AI-driven stocks traded down for the second consecutive session as caution prevailed in trading in Shanghai and Hong Kong. 

CATL, Foxconn Industrial Internet, Luxshare Precision, Alibaba Group, Tencent Holdings, and Baidu declined between 0.8% and 3%. 

Property developers in Hong Kong edged lower 2%, despite the PBoC holding rates steady amid mounting inflationary pressures. 

China Vanke, Sun Hung Kai Properties, Henderson Land Group, CK Asset Holdings, and New World Development declined between 2% and 4%.