Hong Kong: Market tumbles to 22-month low

Hong Kong stock market finished session lower on Monday, 20 December 2021, extending the sharp losses in the previous session and slide to 22-months low, as risk aversion selloff triggered on tracking the broadly negative cues from Wall Street on Friday and decline in Mainland China A-share market as a rate cut in China's lending benchmark failed to lift investor sentiment. Meanwhile, selloff pressure intensified on concerns about the impact of the Omicron variant of the coronavirus, with the fast spreading variant now present in 89 countries.

At closing bell, the benchmark Hang Seng Index declined 1.93%, or 447.77 points, to 22,744.86, its lowest level since March 2020. The Hang Seng China Enterprises Index dropped 2.13%, or 175.26 points, to 8,042.74.

The People's Bank of China has cut one of the country's most important lending rates in a sign that the government is pushing ahead with policy easing measures to counter a loss of economic momentum. The central bank cut the one-year loan prime rate, which is widely used as a benchmark for the loans banks make to their customers, from 3.85% to 3.8%. The five-year loan prime rate remained unchanged from the prior month at 4.65%. Monday's rate cut was the first since April 2020, when the country was grappling with the initial outbreak of coronavirus.

Shares of tech companies extended losses, as it bears the brunt of Beijing's regulatory crackdown. NetEase fell 4.9%. JD.com tumbled 4 per cent, while Alibaba and Tencent lost at least 2.1 per cent. Some index heavyweights in finance and tech sectors such as HSBC Holdings, AIA Group and Meituan were also closed down.

Shares of Chinese property developer dropped as China's first rate cut in nearly two years failed to soothe investors. Sunac China, Kaisa Group and Evergrande Group closed 17.8%, 14.1% and 9.9% lower, respectively.

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