Hong Kong stocks enter bull market: banks, insurers gain after Fed rate decision as China’s policy support adds to cheer
- The Hong Kong Monetary Authority (HKMA) left its base rate unchanged at 5.75 per cent, hours after the Fed kept interest rates steady
- HSBC, the city’s biggest bank, rose as much as 3.4 per cent, and insurance stocks AIA and Ping An also advanced
The Hang Seng Index rose 2.5 per cent to end the day at 18,207.13. The benchmark has risen 20 per cent from a January low and has now entered what is defined as bull-market territory. The Hang Seng Tech Index rose 4.45 per cent, while China’s onshore stock exchanges are closed for the week.
HSBC, the city’s biggest bank, rose 3.4 per cent to HK$69.25. Index heavyweight and tech giant Tencent rose 3.8 per cent to HK$360.40. Insurance stocks were also higher, with AIA rising 2.7 per cent to HK$59.35 and Ping An advancing 5.7 per cent HK$38.
“Banks and insurance companies benefit from higher interest margins when rates are elevated,” said Nitin Dialdas, CIO at Mandarin Capital, who added that investment flows in the broad market were being driven by Beijing’s economic focus at a time when stock market valuations are cheap. “A shift is taking place from west to east,” he said.
“The good news was that the Fed does not appear to be leaning towards a potential hike, despite a run of stronger macro indicators, including some which measure inflation,” said Tim Waterer, chief market analyst at Kohle Capital Markets.