Hong Kong Stocks Rise on China Policy Easing Hopes After Rate Cut

Increased Market Optimism

Hong Kong stocks have surged, heading for a 3-month high amidst rising hopes for China policy easing following the People's Bank of China's recent rate cut. As of 10:05 am local time, the Hang Seng Index climbed 0.2% to 18,296.60, marking its strongest performance since June 20.

Corporate Performance and Growth Potential

A significant boost in market sentiment was observed with the Hang Seng Tech Index rising 0.5% and the Shanghai Composite Index adding 0.2%. Key players such as Lenovo Group saw a rally of 3% to HK$9.68, and Xiaomi advanced by 3.6% to HK$20.55. Alibaba Group Holding and Tencent Holdings also marked gains of 0.9% and 0.2%, respectively.

Impact of Rate Cuts

The People’s Bank of China lowered the 14-day reverse repurchase rate from 1.95% to 1.85% while injecting liquidity into the financial system. This action positions China optimally to enhance its growth strategy, particularly after the recent 50-basis-point rate cut by the US Federal Reserve.

Regional Market Trends

Despite a robust performance in Hong Kong, other major Asian markets showed mixed results. South Korea's Kospi edged up by 0.1%, whereas Australia’s S&P/ASX 200 fell by 0.8%. Meanwhile, Japan's market remained closed for public holiday festivities.