Hong Kong stock market ends flat as China trims its economic growth target

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.