China's Rate Change Causes Market Panic; Big Dive In Hong Kong Stocks
Portfolio Pulse from Piero Cingari
The People’s Bank of China (PBoC) has cut its 1-year loan prime rate (LPR) by 10 basis points to 3.45%, while leaving the 5-year LPR unchanged at 4.2%. This has caused uncertainty in the market, with Goldman Sachs analysts suggesting the move is to defend banks' interest rate margins. Citigroup and UBS Group AG have revised down their forecasts for China's economic growth. The Hang Seng Index, tracked by the iShares MSCI Hong Kong Index Fund (NYSE:EWH), fell by 1.82%. US-traded Chinese stocks, including Alibaba Group Holdings Ltd (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), Tencent Music Entertainment Group (NYSE:TME), Baidu, Inc. (NASDAQ:BIDU), NIO Inc. (NYSE:NIO), and Li Group Inc. (NASDAQ:LI), also experienced market declines.
August 21, 2023 | 2:28 pm
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NEGATIVE IMPACT
Alibaba's stock fell 0.1% following the PBoC's rate cut.
The rate cut by the PBoC has caused uncertainty in the market, leading to a decline in Alibaba's stock.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Baidu's stock slipped 1% following the PBoC's rate cut.
The rate cut by the PBoC has caused uncertainty in the market, leading to a decline in Baidu's stock.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The iShares MSCI Hong Kong Index Fund fell by 1.82% following the PBoC's rate cut.
The rate cut by the PBoC has caused uncertainty in the market, leading to a decline in the iShares MSCI Hong Kong Index Fund.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Tencent Music Entertainment Group's stock dropped 3% following the PBoC's rate cut.
The rate cut by the PBoC has caused uncertainty in the market, leading to a decline in Tencent Music's stock.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
JD.com's stock held steady despite the PBoC's rate cut.
Despite the market uncertainty caused by the PBoC's rate cut, JD.com's stock has remained steady.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Li Group Inc.'s stock edged 0.5% higher despite the PBoC's rate cut.
Despite the market uncertainty caused by the PBoC's rate cut, Li Group Inc.'s stock has edged higher.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
NIO Inc.'s stock rose 2.7% despite the PBoC's rate cut.
Despite the market uncertainty caused by the PBoC's rate cut, NIO Inc.'s stock has risen.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80