Federal Reserve Rate-Cut Hopes Boost Hong Kong Stocks Amid Tariff Talks

Federal Reserve Rate-Cut Expectations Drive Market Growth

Federal Reserve rate-cut hopes fueled a rise in Hong Kong stocks along with major Asia-Pacific markets on optimism for quicker monetary easing. The Hang Seng Index gained 0.5%, advancing to 22,026.11 at 9.50am local time. This week’s performance boosts it 3.3%, on track for the best week since March 7.

Technology Stocks Lead the Way

The Hang Seng Tech Index added 0.8%, driven by strong performances from key players. Baidu surged 4.1% to HK$87.80, NetEase increased 2.9% to HK$166.00, and Tencent Holdings rose 1.7% to HK$479.00. Despite these gains, some stocks faced declines, including Chow Tai Fook Jewellery Group, which fell 3.8% to HK$9.26, and Semiconductor Manufacturing International Corporation, down 3.8% at HK$44.70.

Impact of Fed Comments and Earnings Reports

Broader Asia-Pacific markets strengthened on dovish comments from Fed officials and stronger-than-expected earnings reports from Google’s parent company, Alphabet, which helped boost the S&P 500 Index by 2%. Japan’s Nikkei 225 rose 1.2%, South Korea’s Kospi gained 0.7%, and Australia’s S&P/ASX 200 advanced 0.6%.

US-China Trade Talks Update

Fed governor Christopher Waller and Cleveland Fed president Beth Hammack indicated that rate cuts could occur as early as June if high tariff levels continue to negatively impact the economy and job market. In response to trade talks, China labeled claims of progress as “fake news” amid ongoing discussions about tariff levels.

Market Outlook and New Listings

On the stock market, PXI Auto Components Suzhou debuted with an extraordinary 255% increase to 58.50 yuan in Shenzhen, marking a notable moment amidst these market movements. Overall, the optimism surrounding the Fed’s monetary policies remains a key driver for market performance.