Hong Kong stocks surge to cap best week in 6 months on US rate cut bets
With US inflation data for August coming in line with expectations, a quarter-point rate cut by the Fed is almost certain
Hong Kong stocks notched up the biggest weekly gain in six months after US inflation data solidified expectations of an interest-rate cut by the US Federal Reserve next week.
The Hang Seng Index rose 1.2 per cent to 26,388.16 at the close, taking the gain for the five-day period to 3.8 per cent and sending the benchmark to its highest close since August 13, 2021. The Hang Seng Tech Index advanced 1.7 per cent.
On the mainland, the CSI 300 Index slid 0.6 per cent and the Shanghai Composite Index shed 0.1 per cent.
Alibaba Group Holding rallied 5.4 per cent to HK$151.10 and Baidu surged 8.1 per cent to HK$115.10 after media reports said that the two companies had started using their in-house chips to train their artificial intelligence models. Tencent Holdings gained 2.2 per cent to HK$643.50 and toymaker Pop Mart International Group added 1.2 per cent to HK$276.80.
US consumer prices excluding food and energy rose 0.3 per cent month on month in August, dovetailing with economists’ consensus forecast. Meanwhile, weekly jobless claims increased to the highest level in almost four years. The combination makes a quarter-point rate cut a near certainty at the Fed’s policy meeting on September 18, with traders now pricing in a 93 per cent chance.
A low-interest-rate environment would add further impetus to Hong Kong stocks, which some investment banks say would help them catch up with gains in mainland equities – gains that sent a key benchmark to a decade high last month.