Hong Kong stocks fall to three-week low on Chinese central bank’s broader policy easing shift concerns
- Analysts say fears of the central bank’s shift away from further easing to support the economy could be overdone
- ChiNext index jumps 2 per cent while Shanghai benchmark ends flat
Hong Kong’s benchmark index on Wednesday closed at its lowest level in three weeks on concerns about the Chinese central bank shifting away from broader easing measures to support the economy.
Losses in Chinese financial stocks led the Hang Seng Index 0.53 per cent lower at 29,805.83. China Construction Bank fell 0.71 per cent to HK$6.96 and Ping An lost 1.1 per cent to HK$94.15.
But gains in property developers like China Overseas Land & Investment, which rose 2.65 per cent and China Resources Land’s 2.38 per cent surge, limited further downside. The sector regained some of its lost ground, which was caused on Tuesday by a government commentary on its anti-speculative stance for the sector.
On Wednesday, the People’s Bank of China said that it would offer a targeted medium-term lending facility to banks totalling 267.4 billion yuan (US$39.8 billion) to provide loans to small private enterprises, which have traditionally been underserved by the banking sector.
“Given the Chinese central bank’s move to only provide selective liquidity and support to the economy, there is still concern about whether the Chinese economy could sustain its growth momentum throughout this year,” said Francis Lun, chief executive of GEO Securities. Beijing has set a GDP growth target of between 6 and 6.5 per cent this year.