SHANGHAI: Hong Kong shares slipped on Tuesday, while China stocks struggled for direction as investor optimism waned on expectations that there won’t be strong stimulus early next year.
Hong Kong’s Hang Seng Index closed down 0.3%, and the Hang Seng China Enterprises Index lost 0.4%.
The blue-chip CSI 300 Index edged up 0.1%, while the Shanghai Composite Index was largely flat, trimming early gains.
China’s central bank has told some banks to bring forward some of the loans they plan to extend in early 2024 to late this year and to not overdo lending in the first quarter, three sources with knowledge of the matter said.
The move appears to be aimed at having fewer periods of sharp growth and then declines in lending. Traders expect that there won’t be strong stimulus early next year, denting risk sentiment.
In contrast, Asian shares climbed to fresh two-month highs, taking cues from a rally on Wall Street, while the dollar languished near its lowest in two-and-a-half months on expectations the US Federal Reserve is likely done with interest rate hikes.
Despite the broad weakness in Chinese markets, the CSI 300 Real Estate Index jumped 2.5%, while the Hang Seng Mainland Properties Index surged 2.1%.
Chinese regulators are drafting a list of 50 real estate developers eligible for a range of funding, Bloomberg News reported on Monday.
Shares of Sunac China Holdings jumped 12% after the property developer said each of its restructuring conditions have been met and its debt overhaul plan has become effective.
“We expect Beijing may eventually have to play the role of lender of last resort to rescue some major troubled developers and fill the vast funding gap for building and delivering those pre-sold homes,” said Ting Lu, chief China economist at Nomura.
In Hong Kong, tech giants fell 1%.
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