Hong Kong stocks inch up on last full trading day of year as yuan eclipses 31-month high
Hang Seng Index edges higher as Chinese yuan surpasses 7 against US dollar for first time since May 2023
The Hang Seng Index rose 0.9 per cent to 25,854.60 at the close. The Hang Seng Tech Index gained 1.7 per cent. On the mainland, the CSI 300 Index added 0.3 per cent and the Shanghai Composite Index finished almost unchanged.
A strengthening yuan boosted the appeal of China-linked assets. The onshore yuan rose to 6.9908 against the US dollar, surpassing 7-mark for the first time since May 2023.
The Hang Seng Index is poised to end the year with an almost 30 per cent gain for its best annual performance since 2017, after global investors returned amid receding geopolitical tensions and China growth supported by resilient exports. For the rally to extend into 2026, investors need more faith in forceful stimulus measures from Beijing and further monetary easing by the Federal Reserve to underpin the already stretched valuations of tech companies.
“The foundation for China’s economic recovery still needs to be consolidated,” said Zhao Yang, an analyst at Sealand Securities. “But looking forward, some catalysts could be on the way, such as a cut in the banks’ reserve requirement ratio in China in January, more support for the property market and the boost to Fed rate cuts by its new chair.”
Trading was light before the New Year’s Day holiday. Turnover on the city’s exchange was 26 per cent below the 180-day average on the day, according to Bloomberg data. Hong Kong’s markets will be closed for the afternoon session on Wednesday and for the full day on Thursday.