From Yahoo Finance: 2024-05-02 02:39:41

Hong Kong’s stock market continues to surge, bolstered by the city’s currency peg to the US dollar and global investors rotating out of other markets. The Hang Seng Index and Tech Index both saw significant gains, pushing the former closer to a technical bull market. Strong performance is attributed to the Federal Reserve’s policy outlook and a shift towards Chinese stocks.

The Hong Kong dollar, pegged to the greenback, has shielded local assets from global market turmoil. The city’s currency is one of the only two in Asia to have gained against the dollar over the past month. A rotation of funds from US, Japanese, and global tech stocks into Chinese equities has been a key driver of Hong Kong’s recent outperformance.

Investors are drawn to Hong Kong’s low valuations, supportive capital market policies from Beijing, and potential new measures to address China’s housing crisis, including possible rate cuts. Chinese investors have become increasingly important in driving the Hong Kong stock market, with record-high inflows from the mainland supporting the recent rally. Despite initial reliance on southbound inflows, a broader base of investors is now fueling the market surge.



Read more at Yahoo Finance: Global Money Flocks to Cheap Hong Kong Stocks Amid Fed Repricing