![Hong Kong, Shanghai stocks rally on China property support](https://photo-cdn.urdupoint.com/media/2024/05/_2/740x404/pic_1715968272.jpg)
Hong Kong, Shanghai Stocks Rally On China Property Support
Umer Jamshaid Published May 17, 2024 | 10:51 PM
![Hong Kong, Shanghai stocks rally on China property support](https://photo-cdn.urdupoint.com/media/2024/05/_2/740x404/pic_1715968272.jpg)
Hong Kong and Shanghai stocks rallied Friday after China unveiled its most wide-ranging measures to support the country's battered property sector, but other global markets were subdued after record runs
London, (UrduPoint / Pakistan Point News - 17th May, 2024) Hong Kong and Shanghai stocks rallied Friday after China unveiled its most wide-ranging measures to support the country's battered property sector, but other global markets were subdued after record runs.
The move provided some hope for the world's number two economy.
However, the news was not enough to lift the rest of Asia nor Europe, hit by profit-taking from a recent rally and concerns that bets on a US interest rate cut may have been overdone.
Wall Street's main stock indices flatlined.
Global indices had earlier this week hit fresh highs on hopes of interest-rate cuts in the United States and elsewhere on cooler inflation.
"One day stock markets are making record highs and banking on rate cuts, the next stocks are giving back gains and rate cut expectations are being pared back," noted XTB analyst Kathleen Brooks.
Patrick O'Hare at Briefing.com said "there is a bit of a battle, we suspect, between the fear of missing out on further gains and the fear of overpaying for stocks into what is shaping up to be a slower period of economic growth".
Back in Asia, Shanghai piled on one percent and Hong Kong extended its recent advance, with shares in Chinese property developers soaring.
Beijing announced it would cut the minimum down payment rate for first-time homebuyers and suggested the government could buy up commercial real estate.
Property and construction accounts for more than a quarter of China's gross domestic product but the real estate sector has been under unprecedented strain since 2020, when authorities tightened developers' access to credit in a bid to reduce mounting debt.
Major companies have teetered since then, while falling prices have dissuaded consumers from investing in property. The crisis has put huge pressure on leaders to come up with a plan to help the sector and avoid it spreading to other parts of the economy, but most measures have left investors disappointed.
Officials announced the widest-ranging measures yet at a meeting on Friday attended by regulators, representatives of top banks, local governments and the property market.
No details were provided on how many houses would be bought.
State media also cited the central bank and the National Financial Regulatory Administration as saying they would cut the minimum down payment rate for first-time homebuyers to 15 percent, one of the country's lowest-ever rates.
The rate will be cut to 25 percent for second-home purchases, it added.
Pantheon Macro economist Duncan Wrigley gave the news a cautious welcome.
"China's new property support measures are helpful, but no magic bullet," he said.
"The new measures... are a step in the right direction and should speed up the bottoming out of upper-tier city housing markets, but the policy funding amount announced so far is disappointing and will probably need to be increased."
New York - Dow: FLAT at 39,874.87 points
New York - S&P 500: FLAT at 5,296.16
New York - Nasdaq Composite: FLAT at 16,698.49
London - FTSE 100: DOWN 0.2 percent at 8,420.26 (close)
Paris - CAC 40: DOWN 0.3 percent at 8,167.50 (close)
Frankfurt - DAX: DOWN 0.2 percent at 18,704.42 (close)
EURO STOXX 50: DOWN 0.2 percent at 5,064.14 (close)
Hong Kong - Hang Seng Index: UP 0.9 percent at 19,553.61 (close)
Shanghai - Composite: UP 1.0 percent at 3,154.03 (close)
Tokyo - Nikkei 225: DOWN 0.3 percent at 38,787.38 (close)
Dollar/yen: UP at 155.50 yen from 155.39 yen on Thursday
Euro/dollar: DOWN at $1.0868 from $1.0870
Pound/dollar: UP at $1.2700 from $1.2670
Euro/pound: DOWN at 85.56 from 85.76 pence
Brent North Sea Crude: UP 0.4 percent at $83.57 per barrel
West Texas Intermediate: UP 0.4 percent at $79.57 per barrel
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