Hong Kong stocks’ winning streak extends to third straight day after China signals cut in reserve requirement ratio
- Premier Li Keqiang said the reserve requirement ratio would be lowered ‘at an appropriate time’, prompting speculation that a cut was imminent
- Haidilao and Li Ning pace Hang Seng Index gainers, rising more than 5 per cent
Hong Kong stocks rose for a third day, capping the longest such streak in two weeks, after China signalled a cut in banks’ reserve requirement ratio to cushion the damage to the economy due to the stringent lockdown measures imposed in Shanghai and elsewhere.
The Hang Seng Index gained 0.7 per cent to 21,518.07 at the close on Thursday, paring the weekly loss to 1.6 per cent. The Hang Seng Tech Index and the Shanghai Composite Index each climbed 1.2 per cent. Hong Kong’s markets will be closed on Friday and Monday because of public holidays.
Haidilao International Holdings, Country Garden Services Holdings and Li Ning paced the gains in local stocks, rising at least 5.7 per cent. Alibaba Group Holding slid more than 3 per cent.
Premier Li Keqiang said in a weekly cabinet meeting on Wednesday that the reserve requirement ratio (RRR) would be lowered “at an appropriate time”, prompting speculation that a reduction could come as early this week. The previous two cuts in the ratio in July and December both came within days of similar hints from Li.
Goldman Sach expects China’s central bank to cut the RRR and potentially the policy interest rate in the next few days. The RRR will probably be slashed by 50 basis points this quarter along with a 10 basis-point reduction in the borrowing cost, it said.
