Chinese property stocks in the Hong Kong stock market surged on Friday, marking the second consecutive week of gains, as subdued US inflation heightened anticipation for a potential interest rate cut by the Federal Reserve in September. This outlook, coupled with the attraction of non-US dollar-denominated assets, influenced the market positively.
The Hang Seng Index soared by 2.6% to reach 18,293.38 at the close, securing a 2.8% weekly increase, marking the highest gain in two months. Additionally, the Hang Seng Tech Index saw a rise of 2.3%. In contrast, the Shanghai Composite Index remained steady, as the impact of regulatory restrictions on short-selling in mainland China waned, and investors moderated their expectations ahead of the third plenum scheduled to commence on Monday.
Amidst the market movement, Sun Hung Kai Properties and other Hong Kong-based developers rallied on the expectation that lower funding costs would stimulate home sales in the city. Notably, the Hong Kong dollar’s peg to the US dollar necessitates that the Hong Kong Monetary Authority adjusts the city’s benchmark interest rates in alignment with the Fed’s rate changes.
The share price of Sanxun Holdings Group Ltd jumped by 14.13% or HKD 0.013 to close at HKD 0.10.
The share price of Shimao Group Holdings Ltd rose by 14.29% or HKD 0.10 to close at HKD 0.80.
The share price of Zhuguang Holdings Group Company Ltd soared by 12.10% or HKD 0.015 to close at HKD 0.14.
The share price of Seazen Group Limited surged by 9.35% or HKD 0.13 to close at HKD 1.52.
The share price of Longfor Group Holdings Ltd increased by 8.39% or HKD 0.89 to close at HKD 11.52.
Property developers, the worst performing group in Wall Street, witnessed its most significant surge of the year, as a lower-than-anticipated inflation report fueled expectations of an upcoming interest rate reduction by the Federal Reserve.
Real estate company shares soared by 2.7% on Thursday, marking their most substantial increase in 2024 and reaching their highest level since March. Investors showed interest in various sectors within real estate, including homebuilders, digital, and commercial real estate stocks.
This surge made real estate the top-performing group in the S&P 500 Index on Thursday, with trading volume about 30% higher than the 30-day average, as per data compiled by Bloomberg.
