Staff reporter and agencies
Hong Kong stocks rebounded as the US Federal Reserve is expected to continue interest rate cuts, with the first decision coming out today after Donald Trump reclaimed the White House yesterday.
Fed chair Jerome Powell and other officials were expected to lower rates by 25 basis points in the early morning, a move that will come on the heels of the half-point cut in September, though Trump's second term sparks concerns over inflation and market volatility.
OCBC Hong Kong economist Cindy Keung Ching believes that Trump's potential expansionary policies will not affect the Fed's interest rate cut path in the short run.
Standard Chartered Bank (Hong Kong) also expects to reduce interest rates further next year, as US economic growth and inflation will be crucial in determining the long-term trend of US bond yields.
Hong Kong's market benchmark Hang Seng Index rallied by 2 percent or 414 points to 20,953 points yesterday, with the main board trading volume expanding to about HK$219.8 billion.
The tech gauge advanced over 2.2 percent to 4,677 points.
Mainland financial firms and developers rose, with Ping An Insurance (2318) and Longfor (0960) up by 6.4 percent and 8.7 percent respectively.
Hong Kong Exchanges and Clearing (0388) also increased by about 3.8 percent.
The hope for another stimulus package from Beijing also helped drive up the markets, as a key party meeting closes today.
Standard Chartered Bank (Hong Kong) expects mainland China to increase economic support measures to partly ease concerns over Trump's return to office, with upcoming key meetings, including the ongoing Standing Committee of the National People's Congress and next year's Two Sessions.
Mainland's CSI 300 Index rallied 3 percent or 121 points to 4,145 points.
The onshore yuan closed 46 basis points higher at 7.1603 per US dollar after dipping as much as 301 bps to 7.195 per greenback in the morning session.
Meanwhile, China's exports grew 12.7 percent year-on-year last month, customs data showed yesterday, blowing past a forecast 5.2 percent increase and a 2.4 percent rise in September.
It comes as Trump's sweeping victory in the US presidential election has brought into sharp focus his campaign pledge to impose tariffs on Chinese imports in excess of 60 percent and is likely to spur a shift in stocks to warehouses in China's No 1 export market.
The HSI rallied 414 points. SING TAO
