Hong Kong stocks retreated from a three-month high as property developers and lenders slumped after the monetary authority intervened in the currency market and mopped up liquidity, threatening to push up local interest rates.

The Hang Seng Index fell 0.6%, while the Hang Seng Tech Index declined 0.2%.

In terms of star stocks, Kuaishou rose 3%; Pop Mart, Bilibili, and CATL rose 2%; SMIC rose 1%; while BYD, XPeng, Alibaba, and Mixue fell 3%; NIO and Meituan fell 1%.

The Hong Kong Monetary Authority (HKMA) sold US$1.2 billion and bought the equivalent worth of Hong Kong dollars at HK$7.85 during New York trading hours on Wednesday. It was the first move since 2023 to prevent the currency from weakening beyond the weak side of its trading band.

It had forewarned that the intervention would stoke local interbank rates and make property financing more expensive.

The HKMA move “would push up the Hibor rates across the board and that would cause pressure on Hong Kong’s stocks,” said Zhang Jiqiang, an analyst at Huatai Securities in Beijing. “Historically, the impact is limited over a longer horizon.”