Hong Kong stocks retreat after China’s weak housing data; banks dumped following PBOC’s property support move

Investors rattled by fresh signs of an economic slowdown in China after a report showed the value of new home sales slumped in July, the biggest drop in a year

China’s central bank said it will guide commercial banks to adjust existing mortgage rates and trim down payment ratios to support the ailing property sector

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A pedestrian passes by the Hong Kong Stock Exchange electronic screen in Hong Kong. Photo: AP

Published: 10:22am, 2 Aug 2023Updated: 4:56pm, 2 Aug 2023

Hong Kong stocks retreated as traders unwound bets amid renewed concerns about China’s economy, while banking stocks were under additional pressure following the People’s Bank of China’s (PBOC) reiteration of support for the property sector.

The Hang Seng Index slipped 2.5 per cent to 19,517.38 at close of trading on Wednesday, the biggest daily drop since July 6. The Tech Index lost 3.3 per cent, while the Shanghai Composite Index retreated 0.9 per cent.

Tencent Holdings dropped 3 per cent to HK$343.40, Alibaba Holdings lost 2.8 per cent to HK$95.15, and Meituan slipped 3.3 per cent to HK$140.70. Baidu weakened 3.8 per cent to HK$146.50 while online travel agency Trip.com lost 2.45 per cent to HK$310.20.

All 11 banks in the Hang Seng financial sub-index fell, dragging the gauge down by 2.7 per cent. Construction Bank slipped 3.12 per cent to HK$4.35 and Industrial and Commercial Bank of China slid 2.91 per cent to HK$3.67.

China’s central bank will guide commercial banks to adjust existing mortgage rates and trim down payment ratios to support the ailing property sector during the second half, it said in a statement on Tuesday.