Mainland Chinese stocks fell slightly on Monday, dragged down by property shares, while Hong Kong followed regional peers in the wake of Federal Reserve Chair Jerome Powell’s dovish turn suggesting an imminent rate cut in the world’s largest economy.
Powell on Friday backed an imminent start to interest rate cuts, saying a further cooling in the labor market would not be welcome and expressing confidence that inflation is within reach of the U.S. central bank’s 2 percent target.
Asian stocks rose cautiously, while the dollar and bond yields fell ahead of inflation data that investors hope will pave the way for rate cuts in the United States and Europe.
Meanwhile, China’s central bank rolled over maturing medium-term loans and kept interest rates unchanged, underscoring market expectations for further easing as the economy struggles to gain traction.
At midday, the Shanghai Composite Index fell 0.07 percent to 2,852.34 points.
China’s blue-chip CSI300 index fell 0.07 percent, the financial sector sub-index fell 0.14 percent, the consumer staples sector fell 0.64 percent, the property index rose 2.14 percent and the healthcare sub-index fell 0.96 percent.
China’s Hong Kong-listed H shares rose 0.7 percent to 6,262.6, while the Hang Seng index rose 0.82 percent to 17,756.09.
Shenzhen’s smaller index rose 0.52 percent, the ChiNext Composite Index of startups rose 0.13 percent and Shanghai’s technology-focused STAR50 index fell 0.14 percent.
In the region, MSCI’s index of Asian shares ex-Japan rose 0.59 percent, while Japan’s Nikkei index fell 1.04 percent.
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