Hong Kong stocks flat at close, sentiment upbeat after Shanghai’s property easing moves

Shanghai announced cuts to the down-payment ratio, mortgage rates and offered subsidies to homebuyers and allowed multi-child families to buy one more home

Hua Hong Semiconductors shares extended gains after Beijing unveiled a US$47.5 billion investment plan towards achieving self-sufficiency in the chip sector

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A Semiconductor Manufacturing International Corp. (SMIC) production facility in Shenzhen, China on Wednesday, Jan. 17 2024. Beijing has unveiled a US$47.5 billion investment plan towards achieving self-sufficiency in its semiconductor industry. Photo: Bloomberg

Published: 10:46am, 28 May 2024Updated: 5:06pm, 28 May 2024

A rally in Hong Kong stocks spurred by easing of restrictions on home purchases in Shanghai faded at close of trade on Tuesday, as investors digested the implications of the first property relaxation steps announced by a top-tier city, with much of the expectations already reflected in the prices.

The Hang Seng Index eased by less than 0.1 per cent to 18,821. 16 at the close, after climbing as much as 0.9 per cent during the day. The Hang Seng Tech Index dropped 0.5 per cent, and the Shanghai Composite Index shed 0.5 per cent.

China’s property market was in focus with traders as Shanghai, the country’s biggest commercial city, offered subsidies for homebuyers and allowed multi-child families to buy one more house starting Tuesday, as a follow-through of a nationwide sector rescue plan launched earlier this month. Other easing measures unveiled by the Shanghai government on Monday included cuts in down payment ratios and mortgage rates, and lowering of the threshold for non-locals to buy homes.

“There’s a ramp-up of the policy support for the property market from local-governments,” said Shen Fanchao, an analyst at Zheshang International in Hong Kong. “We’ve seen some-pick-up in the property market. But we still need to see more data to gauge the impact of these policies that have been implemented.”

A city view of Shanghai, east China. It became the first tier-one city to roll out easing measures after China unveiled a sweeping rescue plan for the property market earlier this month. Photo: Xinhua

China Overseas Land and Development slumped 2.4 per cent to HK$35.48 after jumping almost 40 per cent over the past two months. Peer Longfor Group Holdings fell 1.8 per cent to HK$13.38, still up 20 per cent over the same period, and property-management firm China Resources Mixc Lifestyle Services lost 1 per cent to HK$29.65. SMIC shed 1.2 per cent to HK$16.28, surrendering some of the 7.4 per cent gain posted the previous day after Beijing unveiled a US$47.5 billion investment plan towards achieving self-sufficiency in its semiconductor industry. Rivals Hua Hong Semiconductor added 0.4 per cent to HK$19.90, after rising as much as 6 per cent.