Hong Kong stocks track gains on Wall Street momentum as Fed outlook, recovery hopes keep rally alive
- Hang Seng Index advances for a second day with Xiaomi, China Mobile powering gains, while mainland markets tag along
- Benchmarks in Asia-Pacific track gains in overnight US markets amid optimism surrounding the Fed guidance ahead of rate meeting on Wednesday
The Hang Seng Index climbed for a second day, rising 0.7 per cent to 29,027.69 at the close of trading Tuesday. The Shanghai Composite Index added 0.8 per cent, rebounding from a 1 per cent slump on Monday sparked by concerns that improving economic conditions will lead to policy normalisation.
Stock benchmarks from Japan to South Korea advanced by at least 0.5 per cent. All the three key US indices reached fresh highs in overnight trading after 10-year Treasury yield retreated from a one-year high before a Federal Reserve rate meeting on Wednesday.
“More signs of improvement in the US economy appeared, with small- and mid-sized companies reporting that jobs are hard to fill,” said César Pérez Ruiz, chief investment officer at Pictet Wealth Management. “We expect the Fed to remain dovish.”
While surging bond yields are seen as a positive economic signal by Fed officials, the scenario has unnerved equity traders recently, spurring them to switch into the value stocks from lofty technology and consumer companies.
Cofco Joycome Foods jumped 8 per cent to HK$4.99 on expectations that parent Cofco plans to create a new unit by combining its international trading arm with several domestic businesses for a listing, possibly on the Shanghai Stock Exchange.
Two stocks debuted on Tuesday. QingCloud Technologies rallied 29 per cent to 82.13 yuan on Shanghai’s Star Market, while Jiujiuwang Food International dropped 27 per cent from its initial public offering price to HK$0.55.