FX.co ★ Hong Kong Stocks Surge to Highest in Near 4 Years

On Monday morning, Hong Kong stocks surged by 495 points, almost 2%, reaching 25,836. This upswing marks the second consecutive session of gains, propelling the market to its highest point in nearly four years. The rally tracks Friday’s gains on Wall Street, following Federal Reserve Chair Jerome Powell’s remarks at Jackson Hole suggesting potential rate cuts due to a softening labor market. The market experienced widespread gains, notably with the Hang Seng Tech Index jumping over 2.5%, driven by renewed optimism in artificial intelligence following DeepSeek’s release of its enhanced V3 model, which benefits from domestically produced chips. Consumer, property, and financial equities also advanced amid reports from Xinhua that the People's Bank of China (PBoC) will inject CNY 600 billion through its one-year Medium-Term Lending Facility (MLF) to maintain domestic liquidity. However, a cautious sentiment persisted ahead of the release of China's industrial profit data for the January to July period, in light of the first half’s weaknesses, with Hong Kong’s July trade data also expected later this week. Leading gainers included China Resources Land, rising 4.1%; Semiconductor Manufacturing International Corp. (SMIC), up 3.8%; Kuaishou Technology, climbing 3.3%; Meituan, increasing by 3.2%; and Tencent Holdings, which gained 2.6%.