China and Hong Kong Stocks Surge After Fed Speech
Asian stock markets climbed sharply on Monday, driven by strong performances in China and Hong Kong. The optimism followed Federal Reserve Chair Jerome Powell’s widely anticipated speech at the annual Jackson Hole symposium, where he indicated that the U.S. central bank might start easing monetary policy as soon as next month.
Mainland China’s CSI 300 Index extended its winning streak to four consecutive sessions, rising 2.08% to close at 4,469.22. Earlier in the day, the index hit a 37-month high, underscoring renewed investor confidence amid easing financial conditions.
Goldman Sachs analysts commented on the developments, noting that “maturing time deposits could shift into equities and sustain the momentum, given deposit rates have declined notably.” They also pointed out that potential Federal Reserve rate cuts might trigger capital rotation from the U.S. into China, further boosting the equity market. The bank highlighted bond-to-equity rotation as a key driver behind recent market gains.
The Hong Kong stock market also benefited from policy moves, particularly in the property sector. Shares of Chinese real estate companies listed in Hong Kong rallied after Shanghai eased homebuying rules for eligible families. China Vanke pared some earlier gains but still closed up 9.86%, despite reporting a wider first-half net loss of 12 billion yuan ($1.67 billion), compared to 9.9 billion yuan a year earlier. Other property stocks, such as Longfor Group and New World Development, surged 5.22% and 5.1%, respectively.
Hong Kong’s Hang Seng Index jumped 1.94%, finishing at 25,829.91 and approaching a four-year peak. Mining giant Zijin Mining Group led the advance with a 6.38% gain, while technology firm NetEase rose 6.04%. The tech sector overall contributed significantly to the Hang Seng’s performance. The Hang Seng Tech Index soared 3.14% to 5,825.09, with standout performers including electric vehicle maker Nio, which surged 15.17%, and semiconductor equipment manufacturer ASMPT, which gained 7.6%.
Taiwan’s Taiex Index also saw strong momentum, climbing 2.16% to 24,277.38, reflecting robust investor sentiment across the region.
In South Korea, the Kospi Index rose 1.3% to close at 3,209.86. Meanwhile, the small-cap Kosdaq index outperformed, gaining 1.98% to 798.02. Japan’s markets showed more modest gains, with the Nikkei 225 climbing 0.41% to 42,807.82, and the broader Topix Index edging up 0.15% to 3,105.49.
Australia’s S&P/ASX 200 benchmark ended the day flat at 8,972.40, despite crossing the 9,000 mark earlier in the session, suggesting some profit-taking or hesitation after recent gains.
India’s benchmark indices also saw moderate gains. The Nifty 50 rose 0.53%, while the BSE Sensex increased 0.51% as of early afternoon Indian Standard Time (1:50 p.m.).
Beyond equities, economic data from Singapore showed inflation for July at 0.6%, slightly below economists’ forecasts of 0.7% and lower than June’s 0.8%. This easing inflation figure contributed to the overall positive market mood in the Asia-Pacific region.
Meanwhile, U.S. equity futures traded near flat as investors awaited earnings from Nvidia, a leading company in the artificial intelligence space. Nvidia’s results are closely watched due to the growing impact of AI technologies on market trends.
Last Friday’s trading session in the U.S. ended with major indices hitting new highs. The Dow Jones Industrial Average surged 846.24 points, or 1.89%, reaching a record 45,631.74. The broad-market S&P 500 climbed 1.52% to 6,466.91, coming within just three points of its own record high. The tech-heavy Nasdaq Composite gained 1.88%, closing at 21,496.53.
Powell’s indication that the Federal Reserve might begin easing monetary policy as soon as next month has sparked optimism across global markets. Investors are hopeful that this shift could ease borrowing costs and support economic growth, although the timing and extent of any rate cuts remain subject to evolving economic conditions.
Goldman Sachs analysts noted that a key factor sustaining China’s equity momentum is the potential rotation of funds from bonds to equities, particularly as deposit rates fall. Additionally, should the Fed reduce interest rates, capital flows might increasingly shift from U.S. assets into Chinese markets, bolstering local equities.
The rally in Chinese property stocks followed Shanghai’s relaxation of homebuying rules, a move designed to support the struggling real estate sector. This policy easing helped boost sentiment among investors, reflected in notable share price increases for major developers despite some companies reporting significant losses.
The Hong Kong tech sector’s strong performance also signals continued investor appetite for growth-oriented stocks, particularly in the electric vehicle and semiconductor spaces. Nio’s 15% jump reflects growing interest in clean energy and innovation sectors across Asia.
While markets across Asia have generally responded positively, the mixed performance in Australia suggests some regional caution remains, possibly due to external economic uncertainties or profit-taking after recent gains.
