Hong Kong Stocks Gain Traction as Fed Signals Imminent Rate Cuts

Market Surge Driven by Fed Signals

Hong Kong stocks rose, extending a three-week winning run, on optimism borrowing costs will decline from as early as next month, following the Federal Reserve's hints about imminent rate cuts. The Hang Seng Index rose 1 percent to 17,784.99 at 9:55 AM local time, adding to a 1 percent advance last week.

Key Movers and Market Performance

• Tech Index gained 1.3 percent, while the Shanghai Composite Index slipped 0.1 percent.
• Property developer Longfor Group surged 5.5 percent to HK$8.96.
• Wuxi Biologics gained 3.7 percent to HK$10.64.
• Ping An Insurance added 2.1 percent to HK$36.30, and sportswear maker Anta rose 2.4 percent.
• Search engine operator Baidu led Chinese tech stocks, adding 3.2 percent to HK$84.85.
• Tencent climbed 1.6 percent to HK$381.60, while Alibaba Group Holding gained 1.5 percent to HK$83.85.

Markets gained momentum after Fed Chair Jerome Powell indicated that US policymakers are poised for adjustments. The Fed raised its target rate 11 times from March 2022 to July last year, maintaining the current rate since. The next rate-setting meeting is scheduled for September 17-18.

Powell remarked, “The time has come for policy to adjust.” The Fed's decisions carry weight as the Hong Kong Monetary Authority follows these moves closely to maintain its currency peg under the Linked Exchange Rate system.

International Market Reactions

• Japan's Nikkei 225 Index fell 0.8 percent.
• Australia's S&P/ASX 200 advanced 0.7 percent.
• South Korea's Kospi was little changed.