FX.co ★ Hong Kong Shares Rise Modestly After PBoC Move

Equity markets in Hong Kong advanced by 96 points, or 0.4%, reaching 24,900 on Monday morning, building on the positive momentum from the previous trading session. This uptick followed the People's Bank of China's (PBoC) decision to maintain its one-year and five-year loan prime rates at historically low levels, which was widely anticipated by the market. The Hang Seng index achieved its highest point since early 2022, bolstered by widespread gains across sectors and an increase in U.S. futures, fueled by optimism regarding global trade scenarios. U.S. Commerce Secretary Howard Lutnick voiced optimism on Sunday about reaching an agreement with the European Union before the August 1 deadline, although negotiations might extend beyond this date, with tariffs coming into effect afterward. Locally, business sentiment in Hong Kong improved for the second quarter in a row for Q3 2025. However, the potential for further gains was tempered by investor caution pending the release of the city's June inflation data, expected later today. Leading the stock performance were Meituan, climbing 4.2%, Nongfu Spring, up 3.3%, China Hongqiao Group, rising 3.0%, and Lenovo Group, which increased by 2.0%.