Stocks in Hong Kong surge to 3-month peak, propelled by anticipation of interest rate cuts and optimism over capital inflows.
A lively leap for stocks
Stocks in Hong Kong and the mainland saw a surge on Wednesday, with the Hang Seng Index jumping 1.2% to a high not seen since March 19, closing at 24,474.67. The Hang Seng Tech Index followed suit, advancing by 1.2%. On the mainland, the CSI 300 Index added 1.4% and the Shanghai Composite Index rose by 1%.
Alibaba Group Holding gained 2.5% to HK$115.50, while Meituan climbed 1.4% to HK$131.80. Hang Lung Properties surged 8.8% to HK$7.55 and Henderson Land Development appreciated 4.6% to HK$28.75 on expectations that lower borrowing costs would support home sales.
The upward trend in stocks was driven by the Nasdaq 100 surpassing its previous all-time high from February, positive comments from Fed chair Jerome Powell, and increased bets on a rate cut in September. Oil prices, on the other hand, plunged after Israel and Iran agreed to a ceasefire.
Wang Yi, an analyst at Great Wall Securities, stated, "The earlier rate cut could come next month, and that's a boon for market sentiment. Tech stocks are expected to benefit most from the improved market mood." Furthermore, anticipation for the city's benchmark index to reach 25,500 is on the horizon, although the specific timing remains uncertain.
Forecasting the Future
Several prediction sources indicate that a peak near 27,000 for the Hang Seng Index could occur in July 2025, potentially exceeding 25,500. However, other forecasts for the rest of 2025 suggest the index will mostly remain below that level, around 22,000 to 24,000. By late 2025 and early 2026, the index may approach but not reach 25,500. So, while a surge to 25,500 is a possibility, the exact timing remains somewhat elusive. Keep your eyes peeled for exciting stock market movements in the near future!
The upward trend in stocks, as seen in the Hang Seng Index's surge and the anticipated city's benchmark index reaching 25,500, is a sign of growth in finance-oriented businesses and trade, making it an interesting period for investors. The potential for a peak near 27,000 for the Hang Seng Index in July 2025 suggests ongoing financial growth and a continuation of business expansion.
