Hong Kong stocks rallied to their highest level in more than four years on Wednesday as hopes of an interest-rate by the United States Federal Reserve this month continued to fuel investor appetite for risk assets and triggered inflows into Asian markets.
The Hang Seng Index closed one percent, or 262.1 points, higher at 26,200.26 -- a level not seen since Sept 6, 2021. The Hang Seng TECH Index, which represents the 30 largest technology companies listed in the special administrative region, advanced 1.27 percent to 5,902.69 points, while the Hang Seng China Enterprises Index surged 0.93 percent to 9,328.16 points.
Tech giants led the gains, with Tencent Holdings picking up one percent to HK$633.5 ($81.21) and Alibaba Group Holding adding 0.63 percent to HK$142.8.
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On the Chinese mainland, the CSI 300 Index edged up 0.21 percent and the Shanghai Composite Index climbed 0.13 percent.
“There’s indeed virtually no doubt that the Fed will deliver a rate cut this month,” said Benoit Anne, senior managing director at MFS Investment Management.
“Investor sentiment remains buoyant amid ongoing rate-cut optimism, with both Hong Kong and US stocks notching up record highs,” Wing Fung Financial Group said in a report.
From a technical perspective, as Hong Kong stocks extended its winning streak to the fourth straight session, prices at each session closed higher than their opening, signaling sustained upward momentum.
Meanwhile, trading volumes are rising steadily rather than surging abruptly, giving investors greater confidence to join the rally, according to the research house.
READ MORE: HSI hits nearly 4-year intraday peak
However, global investors are keeping a close eye on upcoming US inflation data that might offer an insight into whether inflation in the world’s largest economy is under check.
A controlled inflation outlook could support further gains, while any sign of renewed price pressure will trigger profit-taking, forcing the current rally to face a reality check, Wing Fung Financial Group warned.
Contact the writer at sophialuo@chinadailyhk.com
