Hong Kong Stocks Head for 3-Month High as PBOC Cuts Rate
Hong Kong stocks rose to the highest in three months after China’s central bank cut a short-term policy rate, bolstering the argument that lower interest rates in the US will leave Beijing more room for policy easing.
The Hang Seng Index rose 0.7% as of 10.57am local time, heading for the highest close since June 20. The Hang Seng Tech Index gained 1%, and the Shanghai Composite Index added 0.6%.
Among the top gainers, personal-computer maker Lenovo Group rallied 3.5% and smartphone maker Xiaomi advanced 3.9%. JD.com up 2.1%, Alibaba Group Holding rose 0.8% and Tencent Holdings fell 0.3%.
The People’s Bank of China on Monday lowered the 14-day reverse repurchase rate to 1.85 per cent from 1.95 per cent. It also injected 74.5 billion yuan (US$10.6 billion) of liquidity into the financial system via the tool, it said in a statement.
The Hang Seng Index rose 5.1% last week, logging its best weekly performance in almost five months, after a 50-basis-point rate cut by the Fed raised optimism that emerging markets will position for capital inflows. The policy easing in the US also gives China more room for easing its policy to bolster growth while not triggering capital flight.
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