After trading was paused in the afternoon on Wednesday due to a typhoon alert, the markets in Hong Kong saw a significant increase in their value. Traders carried on with their analysis of China’s reopening of the speculation market while ignoring the possibility of the Federal Reserve raising interest rates much more.
The Hang Seng Index finished the day up 2.4 per cent at 15,827.17, adding to the gain of 5.2 per cent that it saw on Tuesday. At 1:55 p.m., trading was halted on the Hong Kong stock exchange after the observatory issued the No. 8 typhoon warning in anticipation of the approach of Severe Tropical Storm Nalgae. The Hang Seng Tech Index had a gain of 2.7 percentage points, while the Shanghai Composite Index saw an increase of 1%.
The remaining four out of the 73 index members did not make it. The share price of Alibaba Group Holding increased by 2%, reaching HK$67.40, while that of Tencent Holdings increased by 1.4%, reaching HK$230.60, and BYD added 4%, reaching HK$190.90. Sands China increased its share price by 12.0%, reaching HK$17.12, while Galaxy Entertainment increased its share price by 6.7%, reaching HK$41.60.
Both of these companies are Macau casino operators. The increase followed a report that more Chinese towns are adopting inhaled vaccinations, which prompted suspicion that China will modify its zero-Covid policy. The surge occurred after the news.
Kenny Ng Lai-yin, a strategist at Everbright Securities International, described the recent price increases as “technical rebounds” in light of the market’s recent decline. He linked the rally to rumours of China’s reopening and said the market was waiting for concrete developments. He also stated that the market was anticipating future developments.
During the Global Financial Leaders’ Investment Summit on Wednesday, China’s top financial regulators stated that Beijing is “completely focused” on economic growth and is committed to making Hong Kong an even stronger international financial centre to assist achieve that aim.
To participate in the conference, more than 200 global and regional leaders from around 120 global financial organisations have already arrived in the city. During his opening speech, Chief Executive John Lee Ka-chiu declared that “Hong Kong is back,” and he advised financial institutions to “go in front” of the line for business.
The global chief of the Swiss bank Julius Baer stated that the company plans to expand its Hong Kong office so that the city can serve as a hub for household businesses and management of wealth in China and also other Asian markets. This news contributed to the positive sentiment that was already prevalent. Additionally, Citigroup intends to expand the wealth management centre that it operates in the city.
In other news, the Federal Reserve is expected to extend its policy lift-off later tonight by increasing interest rates by another 75 basis points. This comes after an employment report released in the United States on Tuesday revealed that the labour market is still strong.
It is anticipated that the Hong Kong Monetary Authority (HKMA) would do the same thing and hike its base rate by the same amount. This will bring the rate to its highest level since 2008, which will put additional strain on the local economy. As a result of banks increasing their prime rate, demand was stifled, which led to a decrease in the city’s gross domestic product by 4.5 per cent in the third quarter.
The stock markets of Asia did not move. The benchmark index in Australia increased by 0.1 percentage point, while the Nikkei 225 in Japan and the Kospi in South Korea showed little to no movement.