12 Jul 2019
China and Hong Kong stocks went higher after Fed Chairperson Jerome Powel presented his testimony, leading investors to believe that an interest rate cut will take place shortly.
The shift in investments had the Hang Seng Index increasing by 0.1%, reaching 28,471.62. The China Enterprises Index also rose at 10,788.34. In addition, the Chinese CSI300 Index incremented by 0.6% to 3,808.73, whereas the Shanghai Composite Index by 0.4%, reaching 2,930.55. The Shenzhen Composite Index was upped by 0.5% to 1,556.77.
Chief executive of Geo Securities in Hong Kong, Francis Lun stated, ‘Lower interest rates means more money [to spend on properties], which means property prices go up.’ He also saw the likelihood of the rate cuts happening as attracting the traders and investors, ‘The Fed rate cuts at the end of the month will be a temporary boost in the market, but still the problem is there’s no buying interest…most shares are just [going through] rangebound trading.’
Furthermore, the Properties Index continued to grow by 0.4%, as Sino Land, went up by 1.4% to HK$13.38 and CK Asset Holdings increased by 0.8% reaching HK$60.95.
Although the Hong Kong and China stocks went higher, some investors are still not fully convinced of the economy, which is going through its slowest growth in 30 years.