Real Estate Stocks Plunge, Hang Seng Index Takes Biggest Hit among Asian Benchmarks

HONG KONG (AP) — The Hang Seng Index in Hong Kong experienced a significant drop of over 2% in trading today, making it the biggest loser among Asian benchmarks. Real estate stocks led the downward trend after the People’s Bank of China decided to hold its one-year and five-year loan prime rates steady at 3.45% and 4.2% respectively.

The largest loser on the Hang Seng Index was China Resources Land, a property developer, which saw a massive 9.54% plunge in its stocks. Other notable losers included Longfor Group, a residential property services investment firm, which suffered a 5.99% loss, and Haidilao, a popular hotpot chain, with a decline of 6.27%.

Investors have been eagerly awaiting an update from China’s central bank on its one- and five-year loan prime rates, which were expected to remain unchanged at 3.45% and 4.2% respectively. Last week, the People’s Bank of China surprised the market by maintaining the rate on nearly 995 billion yuan ($138.84 billion) worth of one-year medium-term lending facility loans at 2.50%.

Commerzbank analysts commented that the market anticipated no changes to the one-year and five-year loan prime rates. Meanwhile, China’s foreign direct investment (FDI) recorded its sharpest decrease since 2009, falling 8% in Chinese yuan terms. Commerzbank attributed this decline to several factors, including the country’s economic slowdown, high global interest rates, increasing regulatory and geopolitical risks, and the West’s scrutiny of China’s technology sector.

The real estate sector’s downturn in Hong Kong, as evidenced by the drop in the Hang Seng Index, highlights the volatility of the market and its sensitivity to decisions made by China’s central bank. As investors eagerly await updates, market conditions are being closely monitored to gauge the potential impact on future investment decisions.