Hong Kong stocks dip as property developers' debt concerns offset Beijing's housing market push

  • Investing.com
Hong Kong stocks dip as property developers' debt concerns offset Beijing's housing market push

Hong Kong stocks took a downturn on Tuesday from a three-week high, driven by a pullback in property developers due to concerns about potential debt defaults. This overshadowed Beijing's latest efforts to boost home sales and restore market confidence. The Hang Seng Index fell 1.1% to 18,644.58 by HKT 10.03 am, following a 2.5% rally on Monday that marked its highest level since August 11. The Tech Index also fell by 1.1%, while the Shanghai Composite Index saw a decline of 0.5%.

Chinese developers were the biggest losers, with China Resources Land dropping 3.6% to HK$35.10 and China Overseas Land and Investment falling 2.9% to HK$17.40. Internet giants Tencent and Alibaba (NYSE: BABA ) Group also experienced losses, with their shares declining by 0.9% to HK$330.60 and 0.6% to HK$92.65 respectively.

Sinopharm Group, a recent addition to the benchmark index membership, saw its shares slump by 1.5% to HK$22.65 on Tuesday. It replaced property developer Country Garden Holdings in the index, whose shares plummeted by 3.9% to HK$0.98.

Despite an initial surge in property stocks earlier this week following China's decision to ease requirements for first-home purchases and reduce mortgage rates, the measures may not be enough to sustain demand or mitigate defaults among private developers, according to Nomura Holdings (NYSE: NMR ).

Country Garden, previously the nation's largest home builder by sales, is facing a default test this week as a 30-day grace period for $22.5 million worth of coupons for two U.S. dollar-denominated bonds expires on September 6.

Other major Asian markets also saw a decline on Tuesday, with Japan's Nikkei 225 slipping by 0.4%, South Korea's Kospi retreating by 0.2%, and Australia's S&P/ASX 200 losing 0.5%. In contrast, drug maker Hangzhou Minsheng Healthcare saw its shares skyrocket by 250% to 34.96 yuan during its first day of trading in Shenzhen.

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