PHOTO
China's stocks slipped on Tuesday as a cut in the country's benchmark mortgage rate failed to significantly shore up investor confidence about prospects for the struggling property market and broader economy.
The blue-chip CSI300 Index slipped 0.2% by the midday recess, having gained for five sessions, while Hong Kong's Hang Seng benchmark lost 0.3%, with some investors booking profits.
China's five-year loan prime rate (LPR) was lowered by 25 basis points to 3.95%, as authorities ramped up efforts to stimulate credit demand and revive the property market.
The broader market remained weak with shares in information technology, new energy and consumer discretionary falling more than 1%.
In Hong Kong, tech giants lost 1.2%, after rising 6.9% in the previous week, and mainland property developers slipped 0.4%.
Investors doubt a recent rally in stock market can last, even after efforts by authorities to shore up confidence.
"I don't think this will be sufficient, I think you need to have a good macro policy mix of both fiscal and monetary policy," said Saktiandi Supaat, regional head of FX research and strategy at Maybank. "So the fiscal stimulus element is still missing to play a role to enhance sentiment."
Others, however, saw some reasons to be upbeat, with shares in banks and infrastructure climbing more than 2%, while property stocks rose 0.5%.
The cut "was the first cut in eight months, and the largest since that rate was introduced in 2019," said Andy Maynard, head of equities at China Renaissance in Hong Kong.
"We may see a little profit taking on the H-shares, but the momentum to the upside seems maintained," he said.
David Chao, global market strategist for Asia Pacific ex-Japan at Invesco Asset Management said the rate cut, which influences the pricing of mortgages, sends a strong signal that policymakers are serious about providing more support to the property market.
Moreover, China's securities watchdog said it held a series of seminars with market participants who proposed tighter scrutiny of company listings and trading behaviour.
The meetings were led by the watchdog's newly installed chairman Wu Qing and held immediately after the week-long Lunar New Year holiday.
(Reporting by Shanghai Newsroom. Editing by Sam Holmes.)