Hang Seng Index Suffers Longest Decline in a Month Amid Disappointment over China’s Property Policies

Hong Kong shares experience the most extended downturn in a month due to lackluster Chinese property regulations. The Hang Seng Index has wiped out around a third of the over 30 per cent increase noted since the middle of September.

The Hang Seng Index finished with a 1 per cent drop at 20,079.10, erasing an initial surge of up to 2.5 per cent that was triggered by the city's commitment to enhance the attractiveness of its financial market. The standard has seen a 5.5 per cent decrease in just four days. Meanwhile, the Hang Seng Tech Index saw a 1.2 per cent decline.

Benchmarks in Mainland China also experienced a decline, as both the CSI 300 Index and the Shanghai Composite Index dropped by 1.1 per cent.

Housing Minister Ni Hong's presentation on Thursday is the most recent in a series of similar events hosted lately by high-ranking Chinese officials. This comes after the country's senior leaders indicated a full-scale change to curb lagging growth and stabilize the real estate market. Previously, institutions like the central bank, the securities regulator, the planning agency, and the finance ministry unveiled their most recent stimulus strategies to bolster the economy and the stock market.

"Several minor strategies aimed at enhancing domestic demand were unveiled, with the minister emphasizing the freedom of city governments to ease purchasing restrictions," stated Jeff Zhang, a researcher at US analytical company Morningstar. "We anticipate a faster implementation process with more struggling developers getting financial support for completing homes, which could potentially boost the confidence of homebuyers."

The key takeaway from the update was the disclosure that China plans to increase the financial backing for white-listed property ventures to over 4 trillion yuan (US$561.5 billion), a significant rise from the current 2.2 trillion yuan, according to the spokesperson.

The Hang Seng Index has wiped out approximately one-third of the over 30% increase it had experienced since mid-September. This comes as investors anticipate more information on China's financial boost, following an inconclusive finance ministry meeting over the weekend that did not disclose specific expenditure details. Moreover, there are rising worries that the surge in stocks has been too rapid, surpassing the basic economic principles.