Hong Kong Market falls 1.42%

Hong Kong share market finished in negative territory for a third day, Friday, 15 March 2024, as risk aversion selloff continues after China's central bank left a key policy rate unchanged, with shares of property developers leading losses amid declining home prices.

The People's Bank of China (PBOC) kept the rate on the one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation, while withdrawing cash from a medium-term policy loan operation, as authorities continued to prioritise currency stability amid uncertainty over the timing of expected Federal Reserve interest rate cuts.

Market participants are still greatly concerned about China's property crisis, as China's new home prices dropped for an eighth straight month in February, suggesting the fragile property market is struggling to find a bottom despite a slew of measures to shore up the sector. New home prices fell 0.3% month-on-month, in line with January's decline. On an annual basis, prices fell 1.4%, faster than the 0.7% drop in January and the biggest decline in 13 months.

At closing bell, the benchmark Hang Seng Index declined by 240.77 points, or 1.42%, to 16,720.89. The Hang Seng China Enterprises Index sank 86.38 points, or 1.46%, to 5,820.50.

Shares of property sector fell after an official report showed slumping home prices in February. Longfor Group tumbled 3.5% to HK$10.54 and China Resources Land lost 0.8% to HK$25.20.

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