The Hang Seng Index scaled a two-year high yesterday as investors loaded up on stocks amid last-minute speculation about the expected announcement of a long-awaited stimulus plan in the United States. The benchmark climbed 2 per cent, or 473.25 points, to 24,144.67. Only two of the 45 constituent blue chips finished down. The Federal Reserve was poised to announce details yesterday in the US about another round of quantitative easing, referred to as QE2. Investment banks have estimated the size of the central bank's asset purchase scheme could ultimately range between US$1 trillion and US$2 trillion. 'Sentiment is quite buoyant because investors expect the QE2 scale [may] be in line with expectations or higher than expectations and that may continue to keep the US dollar on the weak side,' said Ben Kwong Man-bun, chief operating officer of securities firm KGI Asia. 'A weak US dollar will direct fund flows into emerging markets, leading to higher asset prices.' QE2 should provide impetus for a further devaluation of the dollar because it will increase the supply of it in the market. A weaker US currency may prompt investors to reallocate funds to emerging markets where currencies are appreciating and it could also inflate prices of dollar-denominated assets like commodities. The dollar has already dipped to a 15-year low against the yen this week, trading at 80.22 yen on Monday, according to Bloomberg. Increased fund flows into Asia have found their way into the Hong Kong market, sparking a 17.6 per cent rally in the Hang Seng Index since the start of September. Main-board turnover topped HK$100 billion yesterday for the eighth time in the past two months after only doing so once in the rest of the year. Goldman Sachs has raised its 12-month target for the Hang Seng Index to 29,000 points, citing Hong Kong's position as a gateway for capital reallocation from developed markets to Asian emerging ones. 'A combination of strong domestic growth and abundant global liquidity is how we would describe the investment thesis for Hong Kong,' analysts including Kinger Lau wrote in a report dated yesterday. Goldman Sachs highlighted upside in Hong Kong financial stocks, given the city's strategic role in yuan internationalisation. It also said property developers seemed attractively priced, given expectations of rising asset prices. Sun Hung Kai Properties paced gains in the index yesterday, surging 6.6 per cent. Sino Land rose 3.4 per cent to HK$17.06. While sentiment has picked up in anticipation of the Fed unveiling details of the QE2, Kwong said the market could still track back in the near term if the scheme's scope was less than expected. 'And even if the QE2 is implemented, you can't expect the Fed will [use] its whole quota overnight,' he said.