Hong Kong stocks advance as investors await details from China economic meeting

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China’s economic work conference is expected to conclude on Thursday

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People passed through Exchange Square in Central. Photo: May Tse

Zhang Shidongin Shanghai

Published: 10:23am, 12 Dec 2024Updated: 4:28pm, 12 Dec 2024

Hong Kong stocks rose as investors awaited details from a key Chinese policy meeting that could reveal what measures Beijing might use next year to support its economy, while US inflation data reinforced expectations that a cut to borrowing costs next week is almost certain.

The Hang Seng Index gained 1.2 per cent to 20,397.05 at the close. The Hang Seng Tech Index added 1.5 per cent. In China, the CSI 300 Index climbed 1 per cent and the Shanghai Composite Index strengthened 0.9 per cent.

The bull run in China’s bond market continued, with the yield on the benchmark 10-year government note falling for a seventh straight day to a record low of 1.818 per cent, on optimism about more monetary easing.

China’s economic work conference is expected to conclude on Thursday, which will be followed by a statement published by the Xinhua News Agency. Just days ago, a readout from a Politburo meeting chaired by President Xi Jinping said China would use “more proactive fiscal policies” to improve domestic demand in 2025 with “moderately loose” monetary tools, indicating an inclination toward broad-based stimulus. The Hang Seng Index has rallied 2.7 per cent this week, set for its best performance for a five-day period in two months.

“China will walk a domestic stimulus tightrope as it has to respond to immediate pressures from struggling consumers while preparing for tariff measures that the US could impose,” said Naomi Fink, chief global strategist at Nikko Asset Management.

Adding some impetus to Hong Kong stocks was soft US inflation data that supports the case for a rate cut from the US Federal Reserve this month. The probability of a quarter-point reduction in the benchmark interest rate at the Fed’s policy meeting next week rose to 98.4 per cent from 65.3 per cent a month ago, according to the CME Group.