Hong Kong stocks headed for the biggest weekly gain in six months after US inflation data solidified expectations of an interest-rate cut by the US Federal Reserve next week.
The Hang Seng Index rose 1.5 per cent to 26,484.65 at the noon break, taking the gain for the five-day period to 4.2 per cent and setting the benchmark on course for its highest close since August 12, 2021. The Hang Seng Tech Index gained 2.2 per cent.
Mainland’s equities consolidated, as the CSI 300 Index was little changed and the Shanghai Composite Index climbed 0.2 per cent.
Alibaba Group Holding rallied 5.9 per cent to HK$151.80 and Baidu climbed 8.5 per cent to HK$115.60 after media reports said that the two companies had started using their in-house chips to train their artificial intelligence models. Tencent Holdings gained 2.9 per cent to HK$647.50 and toymaker Pop Mart International Group jumped 3.4 per cent to HK$282.80.
US consumer prices excluding food and energy rose 0.3 per cent month on month in August, dovetailing with economists’ consensus forecast. Meanwhile, weekly jobless claims increased to the highest level in almost four years. The combination makes a quarter-point rate cut a near certainty at the Fed’s policy meeting on September 18, with traders now pricing in a 93 per cent chance.
A low interest-rate environment would add further impetus to Hong Kong stocks, which some investment banks say would help them catch up with gains in mainland equities – gains that sent a key benchmark to a decade high last month.
