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Aileen Chuang

Hong Kong stocks fell on Tuesday along with daily turnover, as investors await developments on the US interest rate front after China left its key lending rates unchanged.
The Hang Seng Index closed 0.3 per cent lower at 17,511.08, reversing a 0.8 per cent advance on Monday. The Tech Index fell 0.5 per cent, while the Shanghai Composite Index dropped 0.9 per cent.
Personal hygiene products maker Hengan International tumbled 6.5 per cent to HK$23.90, while China Resources Beer shed 5.6 per cent to HK$22.65 after their earnings trailed analysts’ projections. Jefferies cut the brewing company’s price target to HK$37.38 from HK$42.
Some tech giants also gave up some of their gains from the previous session. Alibaba fell 1.3 per cent to HK$80.40 and Tencent declined 0.6 per cent to HK$370.40.
Home appliance maker Haier Smart Home declined 3.0 per cent to HK$22.75, JD Health dropped 4.8 per cent to HK$22.05 and personal computer manufacturer Lenovo Group down 2.3 per cent to HK$9.43.
The market is lacking direction because investors are looking for clues about the Federal Reserve’s rate cut from the Jackson Hole meeting, said Kenny Wen, head of investment strategy at KGI Asia. “Without new catalysts, the Hang Seng Index faces resistance, while some investors are choosing to lock in profit,” he added.

The daily average turnover in Hong Kong has fallen 10 per cent to HK$91.4 billion (US$11.7 billion) this month, compared with the one-year average, reflecting investors’ wait-and-see approach. Monday’s turnover stood at HK$74.5 billion, dropping for the second straight day.
The People’s Bank of China on Tuesday left untouched the one-year loan prime rate (LPR), which is used to price most new and outstanding loans, at 3.35 per cent. The five-year LPR, a benchmark for mortgages, was also maintained at 3.85 per cent.
The move was widely expected after the rate cut last month. Analysts expect another cut in the fourth quarter and next year, as well as a further relaxation in the required reserve ratio (RRR) to prop up the economy.
“Our current forecast is looking for one further rate cut in 2024 and two more cuts in 2025,” ING analysts said in a note on Tuesday. “We could soon see further reductions to the RRR as well, but expect those cuts to bring diminishing returns, as right now it appears to be an issue of lacklustre borrowing demand rather than limited funds for banks to lend.”
Electric vehicle maker Li Auto rose 1 per cent to HK$81.45, while rival BYD added 1.5 per cent to HK$224.80.
Biopharmaceutical start-up TYK Medicines jumped 13.2 per cent to HK$13.70 from its offer price of HK$12.10 on its trading debut.
Other major Asian markets were broadly higher. Japan’s Nikkei 225 added 1.8 per cent and South Korea’s Kospi advanced 0.8 per cent, while Australia’s S&P/ASX 200 rose 0.2 per cent.


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Business

Markets

With China leaving its benchmark lending rates untouched as expected, investors patiently await developments on the Federal Reserve front


With China leaving its benchmark lending rates untouched as expected, investors patiently await developments on the Federal Reserve front.
