The Hang Seng Index jumped 1.9 per cent to 16,863.10 at close on Thursday, the biggest rally in over a week. The Tech Index gained 0.9 per cent, while the Shanghai Composite Index was little changed.
E-commerce platform operator Alibaba added 1.8 per cent to HK$72.55 and its rival JD.com climbed 2.3 per cent to HK$109.40. Henderson Land advanced 4.5 per cent to HK$23 and CK Asset jumped 2.8 per cent to HK$36.80, leading gainers among local developers.
Traders are now expecting the Fed to deliver the first cut in June with a 73 per cent chance, up from 54 per cent possibility a month ago, according to the CME Fedwatch tool.
“This has provided relief to the markets” said Ray Sharma-Ong, Investment Director of Multi-Asset at abrdn, while adding that going into the FOMC meeting, markets were concerned that the Fed will reduce the number of projected rate cuts. “It allows investors in the China and Hong Kong market to focus on both fundamentals and policy initiatives. We see room for Chinese equity to generate further upside given cheap valuations and with room for earnings to be revised further upwards.”
Today’s rally helped the Hang Seng Index erase losses for the week and it is now 0.9 per cent in the black, on track for a second straight weekly gain. The benchmark index has rebounded over 13 per cent since hitting a 15-month low in January after Beijing ramped up efforts to stimulate the economy, lifting market confidence.
Elsewhere, fertiliser producer Migao Group gained 0.3 per cent over its IPO price to close at HK$4.09 per share on its trading debut in Hong Kong.
Major Asian markets advanced following the dovish message from the Fed. Australia’s S&P/ASX 200 rose 1.1 per cent and the Nikkei 225 Index in Japan added 2 per cent, while South Korea’s Kospi jumped 2.4 per cent.