The Hang Seng Index rose 1 per cent to 18,112.63 at the close. It snapped a three-day losing streak, rebounding from the six week-lows stuck on Wednesday. The Hang Seng Tech Index gained 1.3 per cent but the Shanghai Composite Index dipped 0.3 per cent.
The S&P 500 index notched another record overnight to top 5,400 for the first time after the Federal Reserve’s dot plot projection indicated four interest rate cuts in 2025, more than the three previously outlined. Sentiment also got a lift from official data that showed US core consume price index (CPI) increased at its slowest pace in more than three years in May.
“Soft CPI puts the Fed back in the driver’s seat to steer towards a precautionary cut later this year to ensure recession remains remote,” said Ashwin Alankar, head of global asset allocation at Janus Henderson Investors. “Softness is supportive of a pre-emptive cut rather than a pivot in Fed policy towards accommodation.”
Chinese electric-vehicle makers rallied after the prolonged overhang of EU tariff hikes was removed. “The magnitude of the tariff hike is in line with expectations, and in our view, will not hinder most, if not all, China EV makers, from making inroads in Europe,” said Jefferies analysts in a note after the decision.
BYD, the nation’s fourth-largest exporter of electric cars to Europe rallied 5.8 per cent to HK$232.80 and affiliate BYD Electronic climbed 3.9 per cent to HK$37.50. Geely Automobile Holdings, the largest such exporter, added 1.7 per cent to HK$9.05 and Li Auto gained 2 per cent to HK$74.40.
“The move is modest compared with the stiff 100 per cent tariffs on Chinese EV imports into the US,” said Vincent Sun, an analyst at Morningstar. “Chinese producers are still competitive compared with their rivals. With additional tariffs, Chinese cars are at similar prices, but with more attractive designs and vehicle technology.”
“If another two or three companies worth HK$20 billion to HK$30 billion succeed in their IPOs and their stocks perform well, that will definitely help the overall market,” said KGI Asia’s head of investment strategy Kenny Wen.
Other major Asian markets mostly advanced. South Korea’s Kospi rose 1 per cent and Australia’s S&P/ASX 200 added 0.4 per cent, but Japan’s Nikkei 225 slipped 0.5 per cent.