China and Hong Kong stocks rise as tech surge offsets slumping banks and developers

Chinese and Hong Kong stocks rose on Thursday, with technology stocks offsetting weak performance in the banking and real estate sub-indexes following signs that jitters in the real estate sector are spilling over into the financial system. ** China’s blue-chip CSI300 index rose 0.5% over the lunch break, while the Shanghai Composite Index gained 0.3%. In Hong Kong, the benchmark Hang Seng Index rose 0.2%.

** Markets are boosted by a surge in tech stocks, as investors brushed off overnight losses on Wall Street after US inflation data at a 40-year high fueled bets on more tightening rapid US monetary policy. **Shanghai’s tech-focused STAR50 index jumped 2.7%, while Shenzhen’s ChiNext start-up board jumped 2.6%. Hong Kong’s Hang Seng Tech index gained 1.7%.

**But investors have dumped banking and real estate stocks as a growing number of homebuyers refuse to pay mortgages on delayed projects until construction resumes. ** The “stop mortgage repayment” movement has spread to many Chinese provinces and involves more than 100 real estate projects, the official Securities Times reported on Thursday.

**The CSI300 Bank Index fell 2.2% by late morning, after hitting its lowest level since March 2020. Smaller lenders, such as China Merchants Bank and Bank of Chengdu, are among the biggest decliners . “China’s housing slowdown may finally negatively affect onshore financial institutions after hitting the offshore high-yield dollar bond market,” wrote Nomura’s chief China economist, Ting Lu.

** Ownership shares also fell sharply. Indexes tracking Chinese developers listed on the mainland and Hong Kong fell more than 2% each. ** “The mortgage amount involved is currently insignificant, but may spread,” wrote CLSA analyst Alvin Wong. “We believe the event could dampen homebuyer sentiment further and therefore there is less chance of a sales recovery in the near term.”

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

Garland K. Long