Hong Kong Stocks Rally: HSI Gains as Fed Signals Rate Cuts Ahead

Market Overview

Hong Kong stocks rose, extending a three-week winning run, on optimism borrowing costs will decline from as early as next month, after the Federal Reserve gave its strongest hint yet on an imminent change in policy.

Hang Seng Index and Tech Stocks Performance

The Hang Seng Index rose 1 per cent to 17,784.99 at 9.55am local time, adding to a 1 per cent advance last week. The Tech Index gained 1.3 per cent while the Shanghai Composite Index slipped 0.1 per cent.

Notable Stock Movements

• Property developer Longfor Group surged 5.5 per cent to HK$8.96.
• Wuxi Biologics gained 3.7 per cent to HK$10.64.
• Ping An Insurance added 2.1 per cent to HK$36.30.
• Anta rose 2.4 per cent.
• Search-engine operator Baidu led winners among Chinese tech stocks, adding 3.2 per cent to HK$84.85.
• Tencent climbed 1.6 per cent to HK$381.60.
• Alibaba Group gained 1.5 per cent to HK$83.85.

Impact of the Federal Reserve's Signals

Markets received a shot in the arm after Fed Chair Jerome Powell signalled last Friday that US policymakers are ready to make a move. The Fed raised its target rate 11 times from the lift-off in March 2022 to July last year, and has kept it unchanged in nine meetings since then.

Looking Ahead

The next rate-setting meeting is on September 17-18. “The time has come for policy to adjust,” Powell said during a speech in Jackson Hole, Wyoming, highlighting the concerns surrounding the balance of risks ahead.