China Stocks and Hong Kong Stocks Surge as Investors Anticipate Rate Cut

Reversal in Hong Kong and China Stocks

Hong Kong stocks rose Thursday, halting a three-day losing streak as investors increased their bets that the Federal Reserve will cut rates later this month following a weak US jobs report.

The Hang Seng Index rose 0.2% to 17,485.68 as of 10:07 AM local time, recovering from a recent decline of 3%. The Hang Seng Tech Index dropped 0.1%, while the Shanghai Composite Index remained relatively unchanged.

Impact on Property Developers

• Wharf Real Estate Investment rallied 2.3% to HK$22.05
• Sun Hung Kai Properties rose 1.5% to HK$74.85
• CK Asset Holdings gained 1.5% to HK$31

Optimism regarding lower borrowing costs is driving expectations for increased home purchases, as Hong Kong's interest rates are linked to the US's fixed-exchange rate.

US Jobs Report Influences Market

New job openings in the US fell short of consensus estimates in July, reaching their lowest level since 2021. This has triggered a decline in two-year Treasury note yields. Investors are keenly awaiting a report on US payrolls scheduled for Friday, which will shed light on the Federal Reserve's response to current job market conditions at its upcoming policy meeting.

Mixed Reactions in Asian Markets

Elsewhere in the region, Alibaba Group Holding dipped 0.4% to HK$79.90 while Tencent Holdings lost 0.3% to HK$371.80. Notably, Alibaba plans to solicit merchant feedback on integrating WeChat Pay.

The larger Asian market mixed, with Japan’s Nikkei 225 slipping 0.4%, while South Korea's Kospi rose 1.1% and Australia’s S&P/ASX 200 added 0.4%.