Hong Kong stocks slip as HKMA currency intervention stokes rate concerns

Banks and developers led losses; HKMA had forewarned that intervention to halt local currency weakness would tighten liquidity and pressure rates

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Exchange Square in Central. Photo: Sam Tsang

Published: 10:53am, 26 Jun 2025Updated: 4:32pm, 26 Jun 2025

Hong Kong stocks retreated from a three-month high as property developers and lenders slumped after the monetary authority intervened in the currency market and mopped up liquidity, threatening to push up local interest rates.

The Hang Seng Index fell 0.6 per cent to 24,325.40 on Thursday, ending a four-day 5.3 per cent rally. The Hang Seng Tech dropped 0.3 per cent. On the mainland, the CSI 300 Index lost 0.4 per cent and the Shanghai Composite Index slipped 0.2 per cent.

Sun Hung Kai Properties tumbled 2.2 per cent to HK$90.95 while peers Henderson Land lost 2.1 per cent to HK$28.15 and CK Asset Holdings weakened 2.1 per cent to HK$34.80. Bank of China (Hong Kong) slipped 0.4 per cent to HK$4.74 and HSBC fell 0.2 per cent to HK$95.40.

The Hong Kong Monetary Authority (HKMA) sold US$1.2 billion and bought the equivalent worth of Hong Kong dollars at HK$7.85 during New York trading hours on Wednesday, it said on Thursday. It was the first move since 2023 to prevent the currency from weakening beyond the weak side of its trading band.

It had forewarned that the intervention would lift local interbank rates and make property financing more expensive.

The HKMA move “would push up the Hibor rates across the board and that would cause pressure on Hong Kong’s stocks,” said Zhang Jiqiang, an analyst at Huatai Securities in Beijing. “Historically, the impact is limited over a longer horizon.”

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