Hong Kong stocks climb to 1-month high as US shutdown nears end and Fed rate cut looms
A deteriorating US jobs market last month has increased the probability of an interest-rate cut next month.
The Hang Seng Index finished 0.9 per cent higher at 26,992.73, the highest close since October 6. The Hang Seng Tech Index added 0.2 per cent. On the mainland, the CSI 300 Index and the Shanghai Composite Index both lost 0.1 per cent.
Aluminium maker China Hongqiao Group surged 5.1 per cent to HK$34.04 after the metal touched a one-year high on the Shanghai Futures Exchange. E-commerce giant JD.com added 1.3 per cent to HK$124.70 after its sales hit a record during the annual Singles’ Day shopping festival on Tuesday. Its affiliate JD Health International rallied 5.3 per cent to HK$64.70. Tencent Holdings added 1.1 per cent to HK$657 before the release of its quarterly result on Thursday. On the downside, Pop Mart International Group slid 1.4 per cent to HK$220 after Bernstein said its fourth-quarter results would be underwhelming due to shrinking demand for its products.
The unprecedented US shutdown may end as soon as Wednesday after the Senate passed a temporary funding bill, removing an overhang on the market. A private jobs report showed US companies cut 11,250 jobs per week on average in the four weeks up to October 25, boosting the chances of a Fed rate cut at the US central bank’s policy meeting in December.
The odds of a reduction next month were about 70 per cent, as coming official government data would confirm the weakness in the jobs market, according to The Global CIO Office, which advises family offices, wealth managers and ultra-high-net-worth individuals.
“More overseas capital is expected to flow to Hong Kong stocks,” said Zhang Xia, an analyst at China Merchants Securities. “Liquidity, together with fundamentals and official policies, will be crucial for the uptrend in Hong Kong stocks.”