Property shares in Hong Kong jump after China cuts key mortgage rate

Shares of Chinese property developers have jumped in Hong Kong as China's central bank cut a key mortgage rate for the first time in almost two years.

The decision comes as concerns grow about a slowdown in the world's second largest economy amid Omicron outbreaks.

At the same time major Chinese property firms, like crisis-hit Evergrande, are struggling to make debt repayments.

On Monday, China surprised markets by cutting rates on medium-term loans for the first time since April 2020.

On Thursday, the People's Bank of China (PBOC) cut its five-year loan prime rate, which is the reference rate used for mortgages, from 4.65% to 4.6%.

It was the first such cut since April 2020, at the height of the coronavirus pandemic in China.

The PBOC also cut its benchmark lending rates for corporate and household loans for the second month in a row.

In Hong Kong, the benchmark Hang Seng Index rose by 2.5% on the news.

In Hong Kong, the share prices of property developers rose sharply, reversing some of the losses they have seen in recent months.

Chinese real estate firms Sunac China, Shimao China and Logan Group saw their stock price rise by more than 10%, while crisis-hit Evergrande's shares were 4% higher.

Investors were also reacting to reports that Chinese regulators may ease restrictions on their access to pre-sale funds.

The PBOC's moves come as Beijing tries to protect the country's economy from amid growing signs that growth is slowing.

On Monday, official figures showed that gross domestic product grew by 4% for the last three months of 2021 from a year earlier.

That was better than most economists had predicted but was a lot slower than the previous quarter.

In another sign of weakness retail sales growth for December fell to 1.7%.

Some economists also highlighted that the growth data, which was the slowest in a year and a half, has yet to take into account the effect of the latest coronavirus outbreaks.