BRIEF: Hong Kong stocks rise after U.S., local rate cuts

The U.S. Federal Reserve announced a widely expected half-point interest rate cut on Wednesday, lowering the federal funds rate target range from 5.25% to 5.5% before the move to a new range of 4.75% to 5%, marking its first such cut since 2020.

Its statement on interest rates showed that 11 of the 12 Fed officials supported half a point cut. The Fed’s dot plot shows it has the opportunity to further cut interest rates by half a point before the end of this year and another 1 point next year.

The Hong Kong Monetary Authority also announced on Thursday that it will lower the discount window base interest rate by 50 basis points to 5.25%. The Hongkong and Shanghai Banking Corp. also lowered its prime rate by 25 basis points, from 5.875% to 5.625%. Hong Kong’s benchmark Hang Seng Index opened slightly lower, but later reversed course and closed up 318 points, or 1.8%, by the noon trading break.

By Lau Chi Hang

To subscribe to Bamboo Works free weekly newsletter, click here