Hong Kong stocks rallied to a two-week high on optimism of further global growth after the US’ latest labour report showed the American economy continued to gather pace without the risk the Federal Reserve will accelerate the pace of raising its interest rates.
The Hang Seng Index added 1.5 per cent, or 472.96 points, to 31,469.17 at midday on Monday. The Hang Seng China Enterprises Index, or the H-share gauge, climbed 1.8 per cent. Mainland Chinese stocks also rose, with a gauge of start-ups rising to a four-month high.
Asian stocks also advanced, following cues in a rally in US equities, after employers hired the most workers in almost two years and wages remained stagnant, alleviating fears the Fed will speed up the rate-increases schedule. Japan’s Nikkei 225 and South Korea’s Kospi index rose at least 1.1 per cent. In New York, the Nasdaq Composite Index closed at a record high on Friday.
“The best of both worlds for equity markets, with the economy in full swing but nary a sign of wage inflation,” said Stephen Innes, head of trading for Asia-Pacific at Oanda Corp. “It doesn’t get much better than that for investors and at least for now has dampened the inflationary fear that weighed on investor sentiment in February.”
The Hang Seng Index has rebounded 6.4 per cent from this year’s low in February, as concerns eased about faster-than-expected increases in borrowing costs. Citic Securities estimated as much as 14 per cent growth earnings increase for Hong Kong-traded companies this year.
