Hong Kong stocks jump after US Federal Reserve’s dovish signals; Tencent gains after doubling share buy-back

Hong Kong stocks jump after US Federal Reserve’s dovish signals; Tencent gains after doubling share buy-back

21 Mar Hong Kong stocks jump after US Federal Reserve’s dovish signals; Tencent gains after doubling share buy-back

Posted at 02:30h in Asia by

Hong Kong stocks advanced after the US Federal Reserve reaffirmed its dovish outlook overnight while keeping its key rate unchanged. Tencent jumped after it unveiled plans to at least double the size of its share repurchases and the city’s property developers rallied on the prospects of lower funding costs in the year ahead.

The Hang Seng Index jumped 2.2 per cent to 16,909.90 as of 10.45am local time, the biggest rally in a week. The Tech Index gained 1.7 per cent, while the Shanghai Composite Index was little changed.

Tencent advanced 1.9 per cent to HK$294.40 after it announced a HK$100 billion share buy-back plan. Alibaba rose 2.3 per cent to HK$72.90 and rival e-commerce platform operator JD.com added 3.1 per cent to HK$110.20. CK Asset jumped 2.8 per cent to HK$36.30 and Sun Hung Kai Properties climbed 2.5 per cent to HK$76.95, leading gains among local builders.
The US Federal Reserve left the target rate unchanged at 5.25 per cent to 5.5 per cent in second policy meeting of the year and projected three interest rates cuts this year saying inflation pressures had eased “substantially”. The Hong Kong Monetary Authority (HKMA) left its base rate unchanged at 5.75 per cent on Thursday in lock-step.

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 from a month ago, according to the CME Fedwatch tool.

“This has provided relief to the markets. It allows investors in the China and Hong Kong market to focus on both fundamentals and policy initiatives.” 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. “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 earlier losses this week and post a 1.2 percent gain, on track to register a second straight week of advances. The benchmark index has rebounded over 13 percent since hitting a 15-month low in January after Beijing ramped up efforts to stimulate the economy, lifting market confidence.

Elsewhere, fertilizer producer Migao Group jumped 2.2 per cent to HK$4.17 per share on its first day of trading in Hong Kong.

All key Asian markets advanced following the dovish message from the Fed. Australia’s S&P/ASX 200 rose 0.9 per cent and the Nikkei 225 Index in Japan added 1.7 per cent, while South Korea’s Kospi jumped 2.1 per cent.

Source link

Tags:
, , , , ,