Hong Kong stocks rose on Wednesday on bets that the US will soon end its longest-ever government shutdown and the Federal Reserve will cut interest rates, brightening the outlook for global growth and spurring optimism about inflows to Asian equities.
The Hang Seng Index rose 0.9%, while the Hang Seng Technology Index gained 0.2%.
In terms of star stocks, Auntea Jenny rose 29%; Mixue Group rose 3%; Xiaomi rose 2%; CATL, JD.com and Tencent rose 1%; while NIO fell 7%; XPeng fell 3%; Alibaba and Baidu fell 2%; Pop Mart fell 1%.
The record 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 next policy meeting in December.
A reopening of the US government will dispel the uncertainty surrounding stocks and the path of the Fed’s monetary policy. Investors will regain access to official economic data from employment and inflation, helping them to get a more accurate picture of the economy for asset recalibration. The resumption of data supply will also be a boon to the Fed, which has been relying on private reports for the labour-market condition over the past 40 days.
Traders have also seen some signs of easing of China’s persistent deflationary trend, with consumer prices returning to growth and declines in producer prices narrowing in October.
