JD.com, Alibaba propel stocks in Hong Kong as China’s backing for markets spurs confidence while Fed begins rate lift-off
- Recovery momentum strengthened as investors snapped up stocks at multi-decade low in valuations after this week’s rout
- The Federal Reserve raised its target rate for the first time since 2018 to contain inflation, while signalling hikes in each of the next six policy meetings this year
The Hang Seng Index climbed 7 per cent to 21,501.23 at the close of Thursday trading, adding to the biggest rebound since October 2008 a day earlier. The Tech Index surged 7.8 per cent, following a record 22 per cent jump on Wednesday, while the Shanghai Composite Index gained 1.4 per cent.
JD.com and Alibaba Group Holding led gainers, surging by at least 12 per cent to HK$254.40 and HK$102 respectively. Meituan soared 12.3 per cent to HK$157.20 while Tencent gained 6.3 per cent to HK$390. Developer Country Garden jumped more than 28 per cent to HK$5.56.
US policymakers boosted the federal funds rate by 25 basis points to a range of 0.25 per cent to 0.5 per cent on Wednesday as expected, while also signalling six more increases this year in the lift-off, after consumer prices rose by the most in four decades.
“They sound more cautious and dovish than expected, proving they would act carefully to minimise the impact of the rate hike,” said Will Shum, portfolio management director in Hong Kong at iFast Financial. “So, no more shock is good news to market sentiment.”
The HKMA sets the base rate at 50 basis points above the lower end of the Fed target rate, or the average of the five-day moving averages of the local overnight and one-month interbank offered rates, whichever is the higher.
Metals producer Ganzhou Teng Yuan Cobalt New Material Company jumped 6.8 per cent on its first day of trading in Shenzhen. Another debutant Beijing Deep Glint Technology, an artificial intelligence software development firm, slipped 5 per cent.
Markets in Asia-Pacific rose. Japanese shares gained 3.5 per cent, while Australian and South Korean stocks appreciated at least 1.1 per cent.