Hong Kong stocks snap 7-day slide as Fed tapering seen as ‘pro-growth’ signal while border reopening awaited
- The markets’ main conclusion from the Fed move appears to have been a ‘pro growth’ theme, which boosted risk appetite, PGIM Fixed Income says
- Hong Kong officials are discussing plans to allow quarantine-free travels to Guangdong province from as early as next month, Post reports
The Hang Seng Index appreciated 0.8 per cent to 25,225.19 at the close of Thursday trading for its best gain in two weeks. The Hang Seng Tech Index jumped 1.6 per cent, with Alibaba Group Holding, Tencent Holdings and Meituan adding at least 2.5 per cent. The Shanghai Composite Index advanced 0.8 per cent.
Chinese electric carmaker BYD emerged as the benchmark‘s top performer, rising 7.8 per cent to HK$315.60 as it reported an 88 per cent increase in its EV sales in October. MGM China and Wynn Macau led winners among Macau casino operators.
The Fed intends to dial back its bond purchases by US$15 billion a month with flexibility according to market conditions, and chairman Jerome Powell said inflation was transitory and the central bank could be “patient” in raising rates.
“Overall, [the] announcement ticked many of the boxes in starting the taper process without causing market disruption,” said Kerry Craig, global market strategist at JPMorgan Asset Management. The Fed also “[pushed] back a little on the market pricing for early rate hikes,” he added.
All the three key US stock indices reached fresh highs in overnight trading after the Federal Reserve decided to unwind its stimulus and reduce its bond purchases by US$15 billion a month, citing “substantial further progress” in the economy.
