Hong Kong stocks secure weekly gain ahead of key rate meetings
In addition to rate decisions in US and Japan, traders will watch Beijing’s economic work conference this month for potential catalysts
The Hang Seng Index advanced 0.6 per cent to 26,085.08 at the close, taking the gain for the week to 0.9 per cent. The Hang Seng Tech Index climbed 0.8 per cent.
On the mainland, the CSI 300 Index rose 0.8 per cent and the Shanghai Composite Index added 0.7 per cent.
Ping An Insurance Group rallied 6.7 per cent to HK$60.45 after Morgan Stanley boosted its share price estimate for the insurer by 27 per cent to HK$89. Peer China Life Insurance climbed 5.5 per cent to HK$28.22. Alibaba Group Holding rose 0.4 per cent to HK$155 and Baidu added 5 per cent to HK$121.60. On the downside, Shenzhou International Group Holdings, the Chinese apparel maker that supplies Nike, slid 3.4 per cent to HK$64.50 after Citigroup cut the price target and earnings estimates for the company, citing the fallout of US tariffs.
Expectations about a 25 basis-point cut in the interest rate by the Federal Reserve next week have sustained a rebound in Hong Kong stocks, with weak readings on recent US jobs market reports boosting the odds of monetary loosening to 87 per cent. Meanwhile, investors are keeping a close watch on Japan’s rate-decision meeting and China’s central economic work conference in the coming weeks for clues on how they should be positioning for portfolio recalibrations.
“A Fed cut in December looks like a done deal,” said Wang Xueheng, an analyst at Guosen Securities in Beijing. “That will be conducive to further multiple expansion in emerging and Asian markets.”
Investors will look to the policy meeting in Japan on December 19 for insight into whether a highly anticipated rate hike will roil global financial markets by unwinding the yen carry trade.