Federal Reserve’s Policy Shift Influences Alibaba and Hong Kong Stocks

Market Rally Driven by Federal Reserve Outlook

Hong Kong stocks experienced a notable rebound, climbing from a one-month low and participating in a broader rally across the Asia-Pacific markets. This surge comes amid bullish bets on potential global rate cuts as investors adjusted their strategies in anticipation of changes from the Federal Reserve.

Alibaba Group and Tech Stocks Lead Gains

Leading the charge, Alibaba Group Holding recorded a remarkable 2.2% increase, reaching HK$83.25. As it became eligible for the Stock Connect scheme, onshore investors turned net buyers, acquiring HK$11.6 billion (US$1.49 billion) worth of shares since the announcement. Rival JD.com also saw a robust gain of 2.4% to HK$104.30, while Baidu increased by 2.1% to HK$82.10.

Federal Reserve Expectations Shape Market Sentiment

The focus is shifting to the upcoming Federal Reserve meeting, where a policy easing is anticipated. Chairman Jerome Powell has hinted at a potential change in course, prompting increasing interest in short-term Fed rate cut trades. According to strategist Dai Qing from Changjiang Securities, this trend may open up structural market opportunities despite ongoing volatility.

Overall Positive Momentum in Asian Markets

General sentiment across Asian markets has improved. The Nikkei 225 surged by 3%, while South Korea’s Kospi rose 1.2% and Australia’s S&P/ASX 200 added 0.7%. WuXi Biologics also showed strong performance, climbing 4.8% to HK$11.84, its affiliate Wuxi AppTec increasing 4.2% to HK$35.85. The regional markets appear to be bullish despite reactions to higher inflation readings.