Hong Kong shares decline amidst central bank decision and weak US signals

Hong Kong shares saw their third consecutive drop on Friday, influenced by the Chinese central bank's decision to maintain a key policy rate amid property market challenges. Additionally, indications of weak US producer prices hinted at the Federal Reserve's reluctance to implement rate cuts in the foreseeable future.

The Hang Seng Index ended the day down by 1.42%, or 240.77 points, closing at 16,720.89, while the Hang Seng China Enterprises Index (HSCEI) fell by 1.46%, or 86.38 points, to 5,820.50. The People's Bank of China's (PBoC) choice to retain the rate on its one-year medium-term lending facility at 2.5% went against expectations of further monetary easing.

Moreover, government data disclosed declines in home prices across 70 large and medium-sized Chinese cities in February. There were reports of 8,200 residential projects identified by authorities in a 'whitelist,' with cash injections via state-owned banks aimed at relieving financial pressure on builders and restarting construction activities.

Despite anticipated supply growth in the coming years, weak demand is forecasted to push home prices downwards. In corporate news, drugmaker WuXi AppTec (603259) and WuXi Biologics (Cayman) (2269) experienced declines of almost 9% and 10%, respectively, after WuXi AppTec withdrew from the international biotechnology trade association Biotechnology Industry Organization (BIO), amidst ongoing efforts by US lawmakers to advance the US Biosecure Act.