Alibaba, Geely, HSBC lift Hong Kong stocks on Fed pause bets while Xpeng surges by record 34 per cent as VW eyes stake purchase
- The odds of a Fed pause in September rose to 78 per cent, from less than 2 per cent a week ago, as Powell keeps maximum policy optionality on the table
- Xpeng surged by record since its 2021 IPO after Volkswagen unveiled a plan to invest US$700 million for a 4.99 per cent stake in the Chinese Tesla rival
The Hang Seng Index gained 1.4 per cent to 19,639.11 at the closing of Thursday trading, the highest since June 29. The Tech Index jumped 2.9 per cent, while the Shanghai Composite Index lost 0.2 per cent.
EV maker and Tesla rival Xpeng surged as much as 34.5 per cent to HK$81.35, a record price-change since its listing in 2021, before closing at HK$81. Macau casino operator Galaxy Entertainment rose 3.9 per cent to HK$56.65 while developer Country Garden jumped 11.8 per cent HK$1.61.
The Fed raised its key interest rate by a quarter point on Wednesday to a range of 5 per cent to 5.25 per cent, bringing the policy rate to the highest in more than two decades and signalled future action will depend on incoming data. The Hong Kong Monetary Authority also lifted its base rate in lockstep to a level not seen since 2007.
“We think the Fed will pause in September,” Ray Sharma-Ong, investment director of multi-asset investment solutions at abrdn, said in a report. Sequential weakening in activity will give Fed space to pause, and Powell indicated [it] can afford to be patient, given where policy rates are at present.