Stimulus Hopes Support Market Advance In China and Hong Kong

Li Chen
24 Dec, 2024
Hong Kong

Stock market indexes in China and Hong Kong advanced in the hopes of additional supportive measures in the approaching year.

The Hang Seng index added 1.1%, and the mainland-focused CSI 300 index gained 1.3% in light trading ahead of the holiday break. 

Financial markets in Hong Kong closed at 12:00 p.m. local time, and the exchange is scheduled to resume regular trading on Thursday. 

In light trading, investors bid up stocks in the hopes that the central bank will cut interest rates by at least 100 basis points in the first half of 2025. 

Moreover, Chinese regulators, finance ministry officials, and local government political leaders are working together to finalize details of the government's proposed fiscal stimulus measures. 

Sources in Beijing indicate the central bank is likely to make a raft of announcements in late February with the sale of the first phase of long-term government bonds that could exceed 5 trillion yuan. 

Policymakers are awaiting details on the possible U.S. tariffs on Chinese exports from the incoming U.S. presidential administration in early February. 

Moreover, the sustained demand from onshore investors has also supported market indexes in Hong  Kong. 

In the year so far, Chinese investors have increased exposure to Hong Kong stock by HK $786 billion, about $100 billion, a record annual flow since the Stock Connect program started a year ago, according to data available from stock exchanges. 

 

China Stock Movers 

The Hang Seng Index increased 1.1% to 20,098.29, and the mainland-focused CSI 300 index advanced 1.3% to 3,983.69. 

CK Asset Holdings increased 1.9% to HK $31.60 after the Li Ka Shing Foundation acquired 3.4 million company stocks worth HK $1105 million last week. 

Zhejiang E-P Equipment soared 185% to 58.21 yuan in Shanghai on the first day of trading. 

The industrial equipment maker sold 61 million shares priced at 20.32 yuan and raised 1.24 billion yuan.