March 5, 2019 / 8:47 AM / 2 months ago

HK shares flat as China cuts growth target

* Hang Seng flat, H-shares up less than 0.1 pct

* Beijing cuts taxes, boosts lending to businesses

* Concerns linger as government lowers GDP goals

HONG KONG, March 5 (Reuters) - The Hong Kong stock market ended unchanged on Tuesday, after the Chinese government vowed to cut taxes and encourage lending but also trimmed its economic growth target.

** At the close of trade, the Hang Seng index was flat at 28,961.60 points, while the Hang Seng China Enterprises index rose less than 0.1 percent. ** China will cut nearly 2 trillion yuan ($298.31 billion) in taxes and fees for companies, Chinese Premier Li Keqiang said at the National People’s Congress on Tuesday. ** Beijing will also step up targeted cuts in the reserve requirement ratio for smaller and medium-sized banks with an aim to boost lending to small companies by large banks by more than 30 percent, said Li. ** But market sentiments were dampened by Li’s other announcement - that China will target an economic growth of 6.0 percent to 6.5 percent in 2019, less than the 6.6 percent gross domestic product growth reported last year. ** Some consolidation for Hong Kong stocks was always likely after Monday’s rally, which came after news that Beijing and Washington were closing in on a deal to remove tariffs, Essence Securities’ analysts wrote in a note on Tuesday. ** “But the overall trajectory is an upward one, and any adjustment is a good opportunity to buy,” the note said on the Hong Kong stock market. ** Sino-U.S. trade talks have been difficult but the two sides have achieved a breakthrough in some areas and will continue their negotiations, Chinese Commerce Minister Zhong Shan said on Tuesday. ** The sub-index of the Hang Seng tracking energy shares dipped 0.6 percent, the financial sector slid 0.3 percent and property stocks lost 0.3 percent. ** Information Technology shares bucked the trend to rise 3.3 percent, following the 4.2 percent rally by tech giant Tencent Holdings. A media report on Monday suggested that the compnay is bidding to take over South Korea’s biggest chat operator Kakao Corp. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.1 percent, while Japan’s Nikkei index closed down 0.4 percent. ** About 2.01 billion Hang Seng index shares were traded. The volume traded in the previous trading session was 2.77 billion. ** At close, China’s A-shares were trading at a premium of 23.84 percent over the Hong Kong-listed H-shares. (Reporting by Noah Sin; Editing by Rashmi Aich)

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