Hong Kong stocks on course for weekly advance amid China growth, US rate cut hopes

Hong Kong stocks traded within a narrow band on Friday, but sentiment remains upbeat and the market is set to close out the week with a gain, driven by hopes of China’s economic recovery and rate cuts by the US Federal Reserve.

The Hang Seng Index fell 0.3 per cent to 18,416.39 at 10.30am local time, moving in a band of less than 1 per cent. Still, the benchmark has risen 2.1 per cent this week. The Hang Seng Tech Index dropped 1 per cent, while the Shanghai Composite Index was little changed.

The benchmark has gained after the mood was lifted by China’s rescue package for the troubled property market and as a slew of soft US economic data reinforced expectations of interest rate cuts. Hong Kong’s monetary policy moves in lock-step with the US as the city’s currency is pegged to the US dollar.

A technical analyst at Oanda said Hong Kong stocks could extend gains due to the breadth of rally, with an increasing number of stocks trading above their 200-day moving averages.

China’s exports probably increased by 5.7 per cent from a year earlier in May, accelerating from a 1.5 per cent gain for the previous month, according to the consensus estimate in a Bloomberg poll. The data is due later on Friday.

Chinese electric-vehicle maker Li Auto tumbled 3.5 per cent to HK$76.10 after peer Nio posted a loss for the first quarter, reflecting the brutal competition in the world’s biggest car market. Personal-computer maker Lenovo Group dropped 5 per cent to HK$10.82 and machine tool maker Techtronic Industries lost 2.8 per cent to HK$97.

Three companies made their trading debuts on Friday. Jiangxi Rimag Group rose 2.5 per cent from its IPO price to HK$15.36 and Easou Technology Holdings surged 64 per cent to HK$9.52, on the Hong Kong stock market. Ningbo Lian Technology jumped almost 400 per cent to 139.90 yuan in Shenzhen.

Other major Asian markets were broadly higher. Japan’s Nikkei 225 slipped 0.2 per cent, while South Korea’s Kospi rose 0.8 per cent and Australia’s S&P/ASX 200 added 0.3 per cent.

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