Hong Kong stocks snap 6-day streak, remain near 2-month high on policy easing hopes
China’s central bank cut a short-term policy rate, bolstering the argument that lower US interest rates leave Beijing more room for easing
The Hang Seng Index slipped 0.1 per cent to 18,247.11 at the close, erasing a gain of as much as 0.9 per cent. The benchmark, which finished at its highest since July 12 on Friday, snapped a six-day, 6.7 per cent rally. The Hang Seng Tech Index retreated 0.2 per cent, and the Shanghai Composite Index added 0.4 per cent.
Among the top decliners, biotech firm Wuxi AppTec slid 3.5 per cent to HK$41 and its affiliate Wuxi Biologics lost 2.4 per cent to HK$13.06. Meituan fell 2.3 per cent to HK$132.80. Tempering losses, smartphone maker Xiaomi advanced 4.4 per cent to HK$20.75 after CEO Lei Jun unveiled the release data for a new product line-up. China Resources Power gained 3.5 per cent to HK$19.88 and Alibaba Group Holding rose 0.6 per cent to HK$87.70.
The People’s Bank of China on Monday lowered the 14-day reverse repurchase rate to 1.85 per cent from 1.95 per cent. It also injected 74.5 billion yuan (US$10.6 billion) of liquidity into the financial system via the tool, it said in a statement.
“The rate cuts provide good support to emerging markets,” said Gary Dugan, CEO of The Global CIO Office. “We expect other central banks to follow. Hence, the more immediate investment opportunity for portfolio leverage to lower rates is probably in the Asian markets, where investors can see several interest rate cuts coming through in the months ahead.”