HONG KONG: Hong Kong shares closed at a near 21-month low on Monday, dragged down by tech giants and financial firms, after a rate cut in China’s lending benchmark failed to lift investor sentiment.

The Hang Seng index fell 1.9% to 22,744.86, while the China Enterprises Index lost 2.1% to 8,042.74 points.

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. “Today’s moderate cut sent a signal of Beijing’s easing bias, but its real impact will be quite limited,” said Nomura analysts.

The Hang Seng Tech Index slumped 3.2% to a new low since its inception in July 2020, with internet giants Alibaba Group, Tencent Holdings and Meituan down between 1.8% and 2.9%.

The Hang Seng Finance Index retreated 1.3%. Some index heavyweights in finance and tech sectors such as HSBC Holdings, AIA Group and Meituan dragged the city’s benchmark Hang Seng Index lower.

Mainland developers listed in Hong Kong tumbled 4.8%. Developers Sunac China, Kaisa Group and Evergrande Group closed 17.8%, 14.1% and 9.9% lower, respectively.

Analysts said the decision to keep the five-year rate unchanged showed Beijing preferred not to use the property sector to stimulate economic growth.

Healthcare firms and consumer discretionary stocks declined over 3% each, while materials-related shares plunged 5.3%.