Why did Hong Kong stocks fall again? Policy expectations come and go quickly!
The market believes that the current level of policy support in China is limited, making it unlikely for Hong Kong stocks to improve significantly. The rebound of US stocks is also hindered, further constraining Hong Kong stocks. In addition, the latest data on China's service industry has further raised concerns among investors about the country's economic recovery.
In September, the Hong Kong stock market rose for one day due to policy stimulation, but on the second trading day, it turned into a decline. What happened?
On Tuesday, September 5th, the Hang Seng Index in Hong Kong opened low and fell more than 2% in the afternoon; the Hang Seng Tech Index fell nearly 3%.
Looking at the market, real estate stocks that benefited from China's new property policies yesterday generally gave back their gains. Except for Country Garden, which rose by 25%, stocks such as China Vanke, China Resources Land, and Greentown China all fell.
It is worth noting that the decline in the Hong Kong stock market today is still related to market expectations for the property market policies.
Last week, China issued two important real estate policies: 1) lowering the down payment ratio for first-time and second-time homebuyers, and 2) reducing the interest rates for existing first-time homebuyers. Subsequently, the four major first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen all implemented the new policy of "recognizing houses but not loans".
Although these heavyweight policies have driven a buying frenzy in cities like Beijing and Shanghai, Nomura Securities believes that the above measures are still insufficient to sustain demand and help alleviate the default problems faced by property developers.
Some market analysts believe that the market still believes that a true recovery in the property market may require more aggressive easing measures. At the current stage, the limited support from Chinese policies makes it unlikely for the Hong Kong stock market to improve significantly, especially with the hindered rebound of the US stock market.
On the other hand, the Caixin China Services PMI for August, released in the morning, was 51.8, a decrease of 2.3 percentage points from the previous value of 54.1, marking the lowest level this year.
Moreover, the growth rate of operating activities in the Caixin services sector in August dropped to a new low for the year, with a slowdown in the growth of new business volume, especially in overseas new orders, which experienced a decline for the first time this year.
As a result, the market believes that the recovery of the Chinese economy is still unstable, further causing concerns among investors and the possibility of foreign investors leading the selling pressure.