SHANGHAI, June 20 (Reuters) – China and Hong Kong stocks fell on Tuesday after the country cut benchmark lending rates less than expected, and Antony Blinken’s Beijing visit signalled little improvement in Sino-US ties, sending property and tech shares lower.
** The Shanghai Composite Index dropped 0.2% by the lunch break, while the blue-chip CSI300 Index edged slightly lower. Hong Kong benchmark Hang Seng lost 2.6%.
** Chinaits key lending benchmarks on Tuesday to shore up a slowing economic recovery, but the easing was not as large as expected.
** Both the one-year, and five-year loan prime rates (LPRs), were lowered by 10 basis points, though many had anticipated a bigger cut to the five-year rate, on which mortgage rates are based.
** “Such marginal easing will probably help prevent growth from slowing sharply, but is unlikely to offer a strong boost to reverse the growth slippage in the near future,” analysts at BofA global research said in a note.
** The Hang Seng Mainland Property Index tumbled 3.8%, while an index tracking China-listed developers dropped 1.3%.
** The market was also disappointed at the lack of major breakthroughs during ato Beijing by US Secretary of State Blinken, during which China and the United States only agreed to try and stabilise their intense rivalry to avoid veering into conflict.
** “China and the US didn’t reach consensus on any major issues during the meeting,” Chinese political commentator Lu Kewen wrote. “There’s also relative big discrepancy in the direction of Sino-US relationship.”
** Technology shares, caught in the crossfire of Sino-US competition, fell. The Hang Seng Tech Index declined 2.6%, while China’s tech-focused STAR market dropped 0.6%. Bucking the trend, the CSI defense Index jumped 3%.
** China’s tourism shares and hotel operators also fell, despite the upcoming Dragon Boat Festival that starts on Thursday, reflecting weak consumer confidence.
(Reporting by Shanghai Newsroom; Editing by Varun H K)
This article originally appeared on reuters.com