On Thursday morning, Hong Kong stocks experienced a modest increase of 44 points, or 0.2%, reaching 26,954 as they rose for the second consecutive session and remained near four-year highs. This uptick in sentiment was bolstered by the Federal Reserve's decision to reduce interest rates by 25 basis points—the first such cut in nine months—and the indication that two additional cuts could be expected this year due to labor market concerns overriding inflation issues. Correspondingly, the Hong Kong Monetary Authority also reduced borrowing rates to 4.5%, marking the lowest level since November 2022. Chief Executive Eddie Yue expressed that this action would bolster the property market and the broader economy.
The technology sector led the charge, driven by reports of Beijing instructing companies to halt Nvidia chip purchases, aiming to decrease dependency on U.S. hardware while encouraging homegrown alternatives. Consumer stocks also gained momentum following Chief Executive John Lee's commitment, outlined in his 2025 policy address, to enhance investment, tourism, and innovation.
Noteworthy performers included SMIC, which rose 5.6% to its highest point since 2004, and Baidu, which jumped 11% due to advancements in AI. Additionally, China Longyuan Power saw a notable increase of 5.0%, Pop Mart rose by 3.4%, and China Tower climbed 2.8%.
