Updated March 15th, 2024 at 11:08 IST

China stocks decline as central bank maintains key rate

The Shanghai Composite Index lost 0.5 per cent, while the blue-chip CSI300 Index slipped 0.2 per cent by the midday break.

Reported by: Business Desk
China stocks fell on Friday | Image:AP Photo
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Chinese markets fall: China stocks fell on Friday set to mark the first weekly drop in five, following the decision of the country's central bank to leave a key policy rate unchanged. The property sector faced downward pressure as declining home prices weighed on sentiment.

The Shanghai Composite Index lost 0.5 per cent, while the blue-chip CSI300 Index slipped 0.2 per cent by the midday break. Meanwhile, Hong Kong's Hang Seng benchmark dropped 2.1 per cent, with the Hang Seng China Enterprises Index slumping 2.4 per cent.

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The broader Asian stocks market also saw a downturn, tracking declines in Wall Street led by the tech sector overnight. This followed hotter-than-expected US inflation data, which tempered expectations for the timing and frequency of Federal Reserve interest rate cuts.

China's central bank decision to maintain the one-year medium-term lending facility rate while withdrawing cash from a medium-term policy loan operation reflects authorities' emphasis on currency stability amid uncertainty surrounding potential Federal Reserve actions.

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Lynn Song, Chief Economist for Greater China at ING, noted the limited room for policy easing by the People's Bank of China (PBOC) before other global central banks initiate rate cuts.

Furthermore, official data revealed that China's new home prices continued to decline for an eighth consecutive month in February, indicating ongoing challenges in the property market despite efforts to bolster the sector.

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The CSI 300 Real Estate Index and the Hang Seng Mainland Properties Index witnessed declines of 1.1 per cent and 3.3 per cent, respectively. Additionally, shares in energy, new energy, and artificial intelligence sectors dropped between 1.4 per cent and 1.7 per cent, while tech giants listed in Hong Kong tumbled 2.8 per cent.

(With Reuters inputs)
 

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Published March 15th, 2024 at 11:08 IST