SHANGHAI: China stocks fell on Monday after a rate cut in China's lending benchmark failed to lift investor sentiment, with analysts saying its impact on the economy would be limited.
The CSI300 index fell 1% to 4,906.38 by the end of the morning session, while the Shanghai Composite Index lost 0.8% to 3,605.21.
The Hang Seng index dropped 1.4% to 22,858.50. The Hong Kong China Enterprises Index lost 1.5% to 8,098.62.
China cut its lending benchmark loan prime rate (LPR) for the first time in 20 months, matching market expectations, in a bid to prop up the slowing economy.
The one-year LPR was lowered by 5 basis points, while the five-year LPR remained unchanged. Analysts said the decision to keep the five-year rate unchanged showed Beijing preferred not to use the property sector to stimulate economic growth.
"The mini rate cut itself is unlikely to have a big impact on the economy," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. Some analysts expect Beijing could ease further to arrest the economic slowdown.
New energy stocks tumbled 3.8%, with new energy vehicles and the photovoltaic industry down 3.2% and 4.1%, respectively.
Coal miners and non-ferrous metal shares declined more than 2.5% each, while the machinery sub-index slumped 3%.
However, real estate developers gained 1.8%, after the official China Securities Journal said China was urging large private and state-owned property companies to acquire real estate projects from troubled developers to reduce risks that mounting debt piles would destabilise the economy.
Hong Kong shares extended losses to a 20-month low, with tech giants, healthcare firms and mainland property developers down between 2.4% and 3%.
Kaisa Group plunged 14%. The embattled property developer said it had not received any notice from bondholders to accelerate repayments yet as it had not repaid a $400 mln offshore bond.
Comments
Comments are closed.