Hong Kong stocks hit 2-month high after China cuts rates for first time in 7 months
Lower borrowing costs will be a major driver for stocks, Guotai Haitong Securities analysts Fang Yi says
The Hang Seng Index closed 1.5 per cent higher at 23,681.48, a level not seen since March 24. The Hang Seng Tech Index added 1.2 per cent. On the mainland, the CSI 300 Index climbed 0.5 per cent and the Shanghai Composite Index advanced 0.4 per cent.
Morgan Stanley’s upbeat view on China’s pharmaceutical industry boosted drug makers, which led the broader market gains. CSPC Pharmaceutical Group jumped 6.1 per cent to HK$6.30, Hansoh Pharmaceutical Group surged 5.7 per cent to HK$24.85 and Sino Pharmaceutical gained 3 per cent to HK$4.18.
Xiaomi climbed 4.7 per cent to HK$54.80, rising for a third day ahead of the tech firm’s unveiling of new products this week. Alibaba Group Holding rebounded 2.1 per cent to HK$121.70 after declining for three days.
The People’s Bank of China on Tuesday lowered the one-year loan prime rate (LPR) to 3 per cent from 3.1 per cent, while the five-year rate, a reference for long-term loans including mortgages, was also cut by 10 basis points to 3.5 per cent. The LPRs were last slashed by a quarter of a percentage point in October following a broad easing by the central bank.