The decline in the stock prices of Chinese companies listed in Hong Kong accelerated in trading on the 22nd, dropping to near their lowest levels since 2005. The lack of new economic stimulus and market support added to investor pessimism.
The Hang Seng China Enterprise Stock Index fell below 5,000, dropping 3.6% to 4,943.24. Tech stocks such as Meituan and Tencent Holdings led the decline.
The development of Chinese stocks, which continue to be sold off, is in sharp contrast to the US stock market, where the S&P 500 stock index hit a new high for the first time in two years on the 19th of last week.
On the 15th, the People’s Bank of China (Central Bank) decided to keep the one-year interest rate of the Medium-Term Loan Facility (MLF) unchanged at 2.5%, and on the 22nd, the Loan Prime Rate (LPR), which is the benchmark for corporate lending rates, was also revised. It was maintained at the current level. But it risks disappointing investors who are looking for a more aggressive stimulus package.
Bloomberg Intelligence analyst Marvin Chen cited a “lack of short-term drivers and capital outflows to more attractive regional investment alternatives,” adding, “Global markets have seen a sharp rise in the semiconductor sector. However, due to geopolitical tensions, there is a possibility that China and other countries and regions will move on different trajectories in this field.
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Original title:China Stock Selloff Worsens as Hong Kong Index Nears 19-Year Low(excerpt)
(Updates with analyst opinion)
2024-01-22 06:56:17
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