HSBC, Alibaba propel Hong Kong stocks near 4-year high on Fed rate-cut outlook
The probability of a 25-basis-point reduction by the Fed this month jumps to 89.4 per cent, according to the CME Group.
The Hang Seng Index on Tuesday closed 1.2 per cent higher at 25,938.13, a level not seen since October 26, 2021. The Hang Seng Tech Index gained 1.3 per cent.
On the mainland, the CSI 300 Index slipped 0.7 per cent and the Shanghai Composite Index retreated 0.5 per cent.
Gold producer Zijin Mining Group rallied 4 per cent to HK$28.86 after gold futures topped US$3,600 an ounce, as lower interest rates make bullion more attractive. HSBC Holdings, the biggest component of the Hang Seng Index, rose 0.7 per cent to HK$102.40. Alibaba Group Holding added 3.4 per cent to HK$141.90 and Tencent Holdings gained 1.5 per cent to HK$627.
Money-market traders had now priced in an 89.4 per cent probability of a 25-basis-point reduction by the Fed at its policy meeting next week, according to the CME Group, after a labour market report last week showed a significant decline in job growth in August. The odds of a half-point cut were 10.6 per cent, the data showed.