Hong Kong Stocks Rise as US Inflation Slows Down

Hong Kong stocks reached their highest level in almost two weeks following a slowdown in US inflation. This decline in inflation strengthens the argument for the Federal Reserve to potentially reduce interest rates, which makes Asian equities more attractive.

The Hang Seng Index experienced a 1.6 percent increase, climbing to 19,590.61 as of 10:09 AM local time. This performance is on track to mark the highest closing since January 6. Meanwhile, the Hang Seng Tech Index rose by 2.1 percent. In neighboring China, both the CSI 300 Index and the Shanghai Composite Index saw gains of 0.7 percent.

On the Hang Seng gauge, nearly all stocks—except for eight—reported increases. Notable performances included China Hongqiao Group, an aluminium company, which surged by 5.6 percent to HK$12.04. Similarly, Zijin Mining Group, a gold producer, saw a 3.7 percent rise to HK$15. Other technology giants showed positive results as well, with Alibaba Group Holding up 1.6 percent to HK$81.20 and Tencent Holdings increasing by 1.1 percent to HK$384.20.

The source of this optimistic sentiment was the US core consumer price index, which measures inflation excluding food and energy costs. In December, this index rose by only 0.2 percent month-on-month, marking the first slowdown in inflation over the past six months. Year-over-year, the index increased by 3.2 percent, which remains above the Federal Reserve's desired target of 2 percent. Some officials expressed confidence that the trend indicates inflation may continue to decrease.

In addition to Hong Kong, other major Asian markets also enjoyed gains. The Nikkei 225 in Japan was up by 0.6 percent, while South Korea's Kospi increased by 1.2 percent. Australia's S&P/ASX 200 saw an increase of 1.3 percent as well.

HongKong, Stocks, Inflation