Hong Kong stocks waver as BYD, Li Auto lead slide in EV makers on price war, Chinese builders gain after surprise cut in lending rate

The Hang Seng Index lost less than 0.1 per cent to 16,152.12 at 10.25am local time. The Tech Index lost 0.1 per cent, and the Shanghai Composite Index was little changed.

The slump in EV stocks ate into early gains in the Year of the Dragon amid bets China will deliver its promise to stem a rout in the stock market with forceful measures. China’s commercial lenders on Tuesday surprisingly cut a key lending rate, signalling renewed attempts to repair the housing market.

Longfor advanced 1.1 per cent to HK$9 while Henderson Land gained 0.2 per cent to HK$21.15 while Wharf REIC surged 2 per cent to HK$25.90.

Banks lowered the five-year loan prime rate, a benchmark for pricing onshore home mortgages, to 3.95 per cent from 4.2 per cent at the monthly setting on Tuesday. Economists had predicted a 10-basis point cut in a Bloomberg survey. The one-year rate was unchanged at 3.45 per cent, versus forecasts for a 5-basis point reduction.

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The cut suggests Chinese authorities are worried about weak demand in the property market as home sales by top developers contracted. Prices of new homes in mainland cities slipped again last month, according to government statistics.

Elsewhere, HSBC climbed 0.2 per cent to HK$62.55 and its subsidiary Hang Seng Bank rose 0.6 per cent to HK$81.55. The UK banking group, which counts Hong Kong as its single biggest market, may report a 76 per cent jump in annual net profit in 2023 according to consensus among analysts tracked by Bloomberg. The report is due on Wednesday.

Other major Asian markets traded lower. The Kospi Index in South Korea tumbled 1.1 per cent while the S&P ASX 200 in Australia weakened 0.3 per cent and the Nikkei 225 in Japan lost 0.1 per cent.