Hong Kong Market rebounds on Fed decision, China rate-cut hopes

Hong Kong stock market finished session higher on Thursday, 16 December 2021, snapping four days losing streak, as risk sentiments boosted up after the U.S. Federal Reserve's tapering decision and plans to hike rates three times next year was within market expectations. Meanwhile, bargain buying prospered on speculation China will loosen policies to counter a slump in the housing market.

At closing bell, the benchmark Hang Seng Index declined 0.91%, or 215.19 points, to 23,420.76. The Hang Seng China Enterprises Index dropped 0.9%, or 75.70 points, to 8,342.91.

Gains in Hong Kong market followed a strong rebound in US stocks overnight, after the Fed said it would accelerate the wind-down of its stimulus bond-buying programme. The US Federal Reserve signalled it will phase out stimulus measures more quickly, ending them in March, which would then allow it to raise lending rates as soon as May. The Fed tapering decision and plans to hike rates three times next year was within market expectations.

Market participants expects that the People Bank of China to implement more easing measures to help arrest the economic slowdown and slump in the housing market. China's central bank partially rolled over maturing medium-term loans on Wednesday as it sought to boost liquidity. The People's Bank of China (PBOC) kept the rate on 500 billion yuan ($78.5 billion) worth of one-year medium-term lending facility (MLF) loans steady for the 20th straight month in December at 2.95%.An earlier decision by the PBOC to lower banks' reserve requirement ratio (RRR) also came into effect on Wednesday, freeing up 1.2 trillion yuan worth of long-term funds. That also helped offset some of the 950 billion yuan worth of MLF loans due to mature on Wednesday. Many market experts are expecting a chance of the China's central bank marginally reducing the lending benchmark Loan Prime Rate (LPR) due next Monday in a bid to counter the economic slowdown.

Property stocks advanced on bets China will ease funding access to alleviate a liquidity crunch. Country Garden advanced 2.1%, while Sunac China and China Aoyuan gained more than 3.1%. Shimao Group jumped 4%.

Powered by Capital Market - Live News