Hong Kong stocks join global rally as US Federal Reserve signals end to interest rate rises

Hong Kong stocks joined a global rally after the Federal Reserve left interest rates unchanged at its latest meeting and signalled an end to its aggressive hikes.

The Hang Seng Index jumped 1.9 per cent to 16,543.17 at 9.50am on Thursday, the biggest gain in a month. The Tech Index climbed 2 per cent while the Shanghai Composite Index added 0.4 per cent.

Tencent rallied 1.6 per cent to HK$312, Alibaba Group climbed 1.3 per cent to HK$70.35 and JD.com added 2 per cent to HK$99.90. Henderson Land jumped 3.5 per cent to HK$23.10 and HSBC added 1.1 per cent to HK$61.20, leading gains among local developers and banks.

The US Federal Reserve left its key policy rate unchanged in the 5.25 per cent to 5.5 per cent range overnight, the fourth pause since it began lifting borrowing costs in March 2022. Officials lowered the median interest rate projection for 2024, with the midpoint forecast to decline by three-quarters of a percentage point from the current range.
Hong Kong’s de facto central bank kept the rate unchanged in lockstep with the US, avoiding further pressure on local businesses and homeowners.

“The dovish signal left by the Fed this round provides room and time for risk assets to perform,” said Ray Sharma-Ong, investment director of multi-asset at abrdn. Asian equities are likely to improve as US growth moderates while Asian growth remains resilient, he added.

Even with today’s gains, the Hang Seng Index has still lost 3 per cent in December to extend its slide in the previous four months. The benchmark’s 17 per cent drop makes it the worst performing major global stock index this year and puts it on track to post an unprecedented fourth year of losses, according to Bloomberg data.

Elsewhere, Zhuhai Pilot Technology surged 91 per cent to 22.02 yuan per share on its first day of trading in Beijing.

Asian markets were mixed on Thursday morning. Japan’s Nikkei 225 lost 0.4 per cent, Korea’s Kospi index rose 1.4 per cent and Australia’s S&P/ASX 200 added 1.6 per cent.

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