China’s central bank slashed a key mortgage rate for the first time in over two years, sending shares of Chinese property developers soaring in Hong Kong.

Concerns over a recession in the world’s second largest economy have grown as a result of Omicron breakouts.

At the same time, prominent Chinese property corporations, such as the crisis-hit Evergrande, are having difficulty repaying their debts.

China stunned the markets on Monday by lowering interest rates on medium-term loans for the first time since April 2020.

The People’s Bank of China (PBOC) reduced its five-year loan prime rate, which is regarded as a benchmark for mortgages, from 4.65 percent to 4.6 percent on Thursday.

It was the first such cut since April 2020, when China was in the midst of a coronavirus outbreak.

For the second month in a row, the PBOC lowered its benchmark lending rates for business and family loans.

The benchmark Hang Seng Index in Hong Kong increased by 3% as a result of the news.

Property developer stock prices climbed dramatically in Hong Kong, erasing some of the previous losses.

Sunac China, Shimao China, and Logan Group all saw their stock prices climb by more than 10%, while Evergrande’s shares rose by 5.8%.

Investors were also responding to news that Chinese officials were considering loosening limitations on pre-sale financing.

The PBOC’s actions come as Beijing strives to defend the country’s economy as indications of slowing growth emerge.

Official numbers released on Monday revealed that the economy increased by 4% in the final three months of 2021 compared to the same period the previous year.

Although this was better than most analysts had projected, it was still a significant slowdown from the previous quarter.

Retail sales growth for December dipped to 1.7 percent, another symptom of weakening.

Some analysts also pointed out that the recent coronavirus outbreaks had yet to be factored into the growth numbers, which was the weakest in a year and a half.