H. Kong stocks fall on disappointing China stimulus

Hong Kong led a decline in Asian markets on Monday as Beijing’s latest stimulus package failed to meet investor expectations. This overshadowed the positive sentiment from Wall Street’s record highs on Friday.

Hong Kong’s Hang Seng index sank 1.9 per cent by mid-morning GMT. A sub-index of mainland Chinese property shares took a bigger hit, tumbling 3.3 per cent.

The disappointment stemmed from the lack of a direct injection of money into the economy, which some investors had hoped for, especially considering the potential impact of tariffs under a second Trump administration.

On Friday, after Chinese markets closed, the National People’s Congress Standing Committee unveiled a 10 trillion-yuan ($1.39 trillion) debt package to ease local government financing strains and stabilise economic growth.

However, analysts like Kyle Rodda of Capital.com pointed out that the measures seemed more focused on repairing government finances rather than directly stimulating the economy.

Other Asian markets showed a mixed reaction. Japan’s Nikkei recovered from early losses and ended flat, while South Korea’s Kospi dropped 0.8 per cent. Australia’s share benchmark declined 0.4 per cent, weighed down by falling commodity stocks.

The dollar index edged up slightly, while the euro remained flat near a four-month low. Gold prices declined, dropping further from recent highs. Base metals in Shanghai also slipped, with copper futures down 0.9 per cent.

Oil prices extended declines from Friday, with Brent futures falling to $73.53 per barrel and WTI futures trading at $69.99 per barrel.

Attribution: Reuters

Subediting: M. S. Salama