SHANGHAI: China stocks slumped on Tuesday as deepening worries about the real-estate sector, after China Evergrande was ordered to be liquidated overshadowed optimism over government measures to boost investor confidence.
The blue-chip index and the Shanghai Composite both closed down 1.8%.
Hong Kong’s Hang Seng Index eased 2.3%, and the Hang Seng China Enterprises Index lost 2.5%.
Broader Asian shares were also dragged lower by China markets, while rising geopolitical tensions propped up oil prices and kept a lid on risk appetite ahead of the US Federal Reserve’s meeting.
A Hong Kong court on Monday ordered the liquidation of property giant China Evergrande Group.
Hong Kong’s leader confirmed his intention to pass fresh national security laws soon to build on sweeping legislation Beijing imposed on the city in 2020.
Some experts are saying the prospect of new laws targeting espionage, state secrets and foreign influence, known as Article 23, could have a deep impact on the global financial hub.
Tech giants listed in Hong Kong lost 3.3%, and mainland property developers slumped 3.5%.
In onshore markets, shares in food & beverage and semiconductors lost 2.9% and 4.1%, respectively, to lead the decline.
Ting Lu, Nomura’s chief China economist, said the latest economic dip is likely to worsen into the spring, and Beijing might still need to find the most effective measures for preventing downward spirals.
China’s 10-year government bond yield dropped to the lowest in more than two decades as investors still expect more policy easing to lift economic recovery after China announced a cut to bank reserves last week.
Yields on China’s 10-year government bonds slid below 2.47% to their lowest levels since June 2002, while those on China’s 30-year government bonds, fell below 2.70% to record lows.
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