Hong Kong, Shanghai lead Asia losses as China rate cut falls flat

China’s economy is being weighed by a crisis in the crucial propert sector, which accounts for a large part of the country’s gross domestic product – Copyright AFP GREG BAKER

Stocks in Hong Kong and Shanghai led losses across most of Asia on Tuesday as a smaller-than-forecast interest rate cut by China’s central bank added to worries about the lack of action to kickstart the country’s lumbering economic recovery.

The optimism that fed last week’s rally across world markets appears to be fading as traders are left disappointed by Beijing’s efforts to act, even as growth slows and weakness persists.

The People’s Bank of China reduced its benchmark five-year rate — used to price mortgages — by 10 basis points, less than the 15 points expected, though it did meet forecasts for a 15-point reduction in the one-year rate.

The move came after monetary policymakers last week lowered two other key rates and pumped billions into financial markets.

Stocks in Hong Kong dropped more than one percent, with tech firms — which are susceptible to higher bor