FX.co ★ Overbought Hang Seng Nonetheless Called Higher

The Hong Kong stock market extended its rally into a fifth consecutive session, amassing over 900 points or a 5.2 percent gain. The Hang Seng Index now hovers just above the 18,000 mark, though profit-taking is anticipated on Friday.

Globally, the outlook for Asian markets is positive, bolstered by optimism regarding economic prospects and interest rates. Both European and U.S. markets surged, setting the tone for a robust opening in Asian bourses, albeit with potential for profit-taking as the day progresses.

On Thursday, the Hang Seng Index surged by 353.14 points, or 2.00 percent, closing at 18,013.16, buoyed by broad-based gains especially in property and technology sectors. The trading range for the day spanned from 17,602.45 to 18,071.10.

Key performers included Alibaba Group, which climbed 3.44 percent, and Alibaba Health Info, which rallied 4.91 percent. Other notable gainers were ANTA Sports with a 2.63 percent increase, China Life Insurance up by 2.76 percent, and China Mengniu Dairy which leapt by 4.87 percent. China Resources Land soared 7.77 percent, while CITIC rose 1.58 percent. CNOOC edged up by 0.11 percent, CSPC Pharmaceutical gained 0.86 percent, Galaxy Entertainment advanced 4.49 percent, and Haier Smart Home surged 7.69 percent. Hang Lung Properties and Henderson Land saw gains of 1.82 percent and 2.06 percent, respectively. However, Hong Kong & China Gas dropped by 0.93 percent, and Lenovo slipped by 0.64 percent. Industrial and Commercial Bank of China increased by 0.23 percent, JD.com surged 7.19 percent, Li Auto soared 5.39 percent, and Meituan increased by 4.04 percent. New World Development gained 1.40 percent, Nongfu Spring accelerated 5.13 percent, Techtronic Industries increased 2.48 percent, Xiaomi Corporation gathered 1.43 percent, and WuXi Biologics spiked 5.21 percent.

Wall Street provided a broadly positive lead, with major indices opening solidly higher and maintaining their gains throughout the session. The Dow Jones Industrial Average surged 522.09 points, or 1.26 percent, to close at 42,025.19. The NASDAQ rallied by 440.68 points, or 2.51 percent, ending at 18,013.98, while the S&P 500 advanced 95.38 points, or 1.70 percent, to finish at 5,713.64.

The rally in U.S. markets was fueled by continued reaction to the Federal Reserve's announcement on Wednesday of an interest rate cut by half a percentage point. The Fed's forecast for ongoing rate cuts in the coming months and into the next year has generated optimism that the central bank can achieve a soft landing for the economy. Additionally, the Labor Department reported a significant decline in first-time claims for U.S. unemployment benefits, reaching a nearly four-month low.

Oil prices also moved higher on Thursday, driven by escalating tensions in the Middle East that raised concerns about potential supply disruptions. West Texas Intermediate Crude oil futures for October delivery rose by $1.04, or 1.5 percent, to settle at $71.55 per barrel.

In local economic news, Hong Kong is set to release August consumer price data later today. In July, the overall inflation rate was up 1.0 percent on a month-to-month basis and 2.5 percent year-on-year.