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HONG KONG: Hong Kong stocks slipped on Tuesday, a day after worries about the future of embattled developer China Evergrande Group shook global markets.

The Hong Kong benchmark, which sank to its lowest since Oct. 5, 2020 in morning trade of 23,771.46, was down 0.3% at 24,022.12 by midday break. China Evergrande fell 3.5%.

An index tracking property and construction stocks gained 1%, recovering from sharp declines on Monday, led by a 14.2% surge in Guangzhou R&F Properties after it said it would raise $2.5 billion by borrowing from major shareholders and selling a subsidiary.

“The market sentiment improved a bit on R&F fund raising cheers,” said Steven Leung, a sales director at UOB Kay Hian in Hong Kong, adding, default risk was still a significant concern.

Mainland Chinese stock markets are closed for the mid-autumn festival till Sept. 21 and will reopen on Wednesday, Sept. 22.

Evergrande, China’s most indebted developer, faces a major test this week as it is due to pay $83.5 million in interest relating to its March 2022 bond on Thursday. It has another $47.5 million payment due on Sept. 29 for March 2024 notes.

Evergrande is confident it will “walk out of its darkest moment” and deliver property projects as pledged, its chairman said in a letter to staff reported by local media.

Overnight, the S&P500 shed 1.70%, its biggest drop in four months, which analysts attributed to worries about Evergrande shaking already jittery markets.

Chinese tech stocks listed in Hong Kong fell on Tuesday, with the Hang Seng Tech Index down 1.5%.

Bilibili led the slide in the tech index, dropping 4.5%, while NetEase dropped 4.2%.

Hong Kong property stocks rebounded following a sell-off in the previous session with CK Asset rising 1.9%, SHKP gaining 1.6%, New World Development climbing 1.2% and Henderson Land up 0.5%.

Both the Hong Kong dollar and the Chinese yuan, traded offshore, steadied after weakening to a three-week low against the dollar on Monday.

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