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Chinese and Hong Kong Equities Dip Despite Record 5-Year Loan Rate Cut

CHINA STOCKS

Hong Kong and China equities opened lower on Tuesday. Chinese banks have cut the 5-year loan prime rate by 25bps to 3.95%, marking the most substantial reduction on record and surpassing expectations. However, concerns persist among investors that recent policy announcements and market headlines may not be sufficient to halt the sell-off in Chinese and Hong Kong equities that has occurred over the past few months.


  • Hong Kong equities opened higher but swiftly erased gains. The HSI rose as much as 0.40% at the open but is now trading 0.10% lower. Meanwhile, the HS Tech Index is down 1.00%, and the Mainland Property Index, which initially opened 2% higher, now trades down flat%.
  • Chinese equities face similar challenges, with the 5-year loan prime rate reduction offering limited support. CSI300 is down 0.36%, Chinext is down 0.45%, and the CSI1000 is down 0.95%.
There is minimal economic data expected for the remainder of the week in China, with Hong Kong set to release its unemployment rate later today. Attention is focused on whether the equity market can maintain stability; otherwise, further announcements from policymakers may be anticipated.
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