Hong Kong stock benchmark drops below 20,000, surrendering stimulus gains

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Hang Seng Index falls to lowest point since September 25, erasing a policy-induced rally that had added as much as 27 per cent

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People walk past Exchange Square, home of Hong Kong’s bourse operator, on October 8, 2024. Photo: AP

Mia Castagnone

Published: 10:38am, 12 Nov 2024Updated: 4:44pm, 12 Nov 2024

Hong Kong’s stock benchmark fell below 20,000 for the first time since Beijing announced a large package of stimulus measures in late September. Data showed borrowing in mainland China slowed in October.

The Hang Seng Index fell 2.8 per cent to 19,846.88 at the close on Tuesday, bringing it to the lowest point since September 25 and erasing all gains from the policy-induced rally. The Tech Index dropped 4.2 per cent. The CSI 300 Index declined 1.1 per cent, and the Shanghai Composite Index fell 1.4 per cent.

Automobile dealer Zhongsheng Holding led losses, falling 9.6 per cent to HK$17.20, while aluminium producer China Hongqiao Group plunged 8.7 per cent to HK$13.02. Electric vehicle maker Li Auto lost 5.6 per cent to HK$90.25.

Alibaba fell 3.8 per cent to HK$90.55, while JD.com slid 5 per cent to HK$144.10. Later this week the e-commerce giants will share sales results from Singles’ Day – China’s busiest online shopping festival.

The Hang Seng Index gained as much as 27 per cent after Beijing announced a slew of measures to revive the economy on September 24. But a hoped for fiscal stimulus failed to materialise on Friday when the government unveiled a 10 trillion yuan (US$1.4 trillion) debt package to ease local government financing strains. The package came as a letdown to the market.

“Any positive catalyst looks absent after the disappointing stimulus announcement in China,” said Gary Ng, a senior economist at French investment bank Natixis. Investors are still sitting on the safe side and assessing the uncertainties in Trump’s policies and geopolitical risks between China and the US, he added.