Alibaba, ICBC, Hong Kong developers pace stock gains on Fed pause signal, China holiday spending boost
- Traders cheered the prospect of an imminent pause in the Fed’s tightening cycle, following recent US bank failures and recession risks
- Markets in mainland China resumed trading after a three-day closure, with strong data aiding buying sentiment despite frustration among global investors
The Hang Seng Index increased 1.3 per cent to 19,948.73 at the close of Thursday trading. The Tech Index added 0.6 per cent while the Shanghai Composite Index added 0.8 per cent from the level on April 28.
Alibaba Group added 0.4 per cent to HK$80.70 while Meituan gained 0.5 per cent to HK$132 and JD.com climbed 2.4 per cent to HK$137.50. Henderson Land appreciated 1.3 per cent to HK$28.20, while Sun Hung Kai Properties jumped 2 per cent to HK$108.90 and New World Development rose 1.2 per cent to HK$20.70.
China’s biggest lender ICBC soared 5 per cent to HK$4.37 while Bank of China (Hong Kong) surged 4.2 per cent to HK$3.24 and Construction Bank rallied 4.1 per cent to HK$5.36.
The Federal Reserve lifted its target rate by a quarter point, as expected and hinted it may be done for now. It did not mention the need for further tightening as appropriate, which was previously noted in its March statement, following growing concerns about regional bank failures in the US this year.
“We are likely at or very near the end of the rate hike cycle,” said Kristina Hooper, chief global market strategist at Invesco, who noted similar Fed language when it hit the pause button in 2006. “This is likely to pave the way for more supportive conditions for risk assets such as equities.”