FX.co ★ Hong Kong Shares May Bounce Higher On Thursday

The Hong Kong stock market concluded its three-day winning streak on Wednesday, during which it accumulated nearly 380 points or roughly 2 percent. With the Hang Seng Index now positioned just over the 19,740 mark, there is potential for fresh momentum as Thursday approaches.

Globally, the forecast for Asian markets is optimistic, buoyed by a more favorable outlook on interest rates. Nevertheless, geopolitical factors could curb potential gains. Both European and U.S. markets closed on a high note, suggesting a similar positive opening for Asian markets.

On Wednesday, the Hang Seng Index dipped marginally amid losses in technology stocks and mixed performances from the property and financial sectors. The index diminished slightly by 3.86 points, a 0.02 percent decrease, ending at 19,742.46, with intraday movement between 19,615.61 and 19,823.09.

In terms of active stocks, Alibaba Group declined 0.53 percent, and Alibaba Health Information slipped 0.54 percent. Conversely, ANTA Sports saw a modest rise of 0.06 percent. China Life Insurance dropped 0.39 percent, while China Mengniu Dairy fell 1.15 percent. China Resources Land and CITIC experienced gains of 0.42 percent and 0.45 percent respectively. CNOOC surged by 2.30 percent, whereas CSPC Pharmaceutical took a notable fall of 1.58 percent. Galaxy Entertainment saw a slight increase of 0.14 percent, and Haier Smart Home improved by 0.38 percent. Hang Lung Properties declined sharply by 2.27 percent, Henderson Land retracted by 1.39 percent, and Hong Kong & China Gas rose by 0.17 percent. Industrial and Commercial Bank of China saw a rise of 0.21 percent. JD.com dropped significantly by 2.00 percent, Lenovo decreased by 1.48 percent, and Li Auto edged down by 0.23 percent. Li Ning slipped 0.12 percent, Meituan fell 0.18 percent, and New World Development plunged 2.29 percent. Nongfu Spring lost 0.71 percent, Techtronic Industries decreased 0.97 percent, WuXi Biologics increased 0.60 percent, while Xiaomi Corporation and CLP Holdings remained flat.

Wall Street provided a positive lead as major indices started and ended Wednesday’s session on an upward trajectory, closing at record highs. The Dow Jones Industrial Average climbed 308.51 points, or 0.69 percent, to settle at 45,014.04. The NASDAQ rose 254.21 points, or 1.30 percent, to finish at 19,735.12, and the S&P 500 added 36.61 points, or 0.61 percent, closing at 6,086.49.

The robust performance on Wall Street was fueled by optimism regarding interest rate trends, driven by weaker-than-expected U.S. economic data releases. ADP's report on private sector employment showed a smaller increase than anticipated for November. Additionally, the Institute for Supply Management reported slower-than-expected growth in the U.S. service sector for the same period.

In light of the data, CME Group's FedWatch Tool suggests a 75.5 percent likelihood that the Federal Reserve will reduce interest rates by 25 basis points later this month. However, Federal Reserve Chair Jerome Powell, speaking later in the day, emphasized a prudent approach to rate cuts due to the persistent strength of the economy.

Meanwhile, crude oil prices dropped on Wednesday amid geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict, as well as political instability in South Korea and France. West Texas Intermediate crude oil futures for January delivery fell by $1.40, or 2 percent, closing at $68.54 per barrel.