Hang Seng Index: Trump, China’s Stimulus, and the Fed Rate Cut – Weekly Recap

US Markets Surge on Trump Win and Fed Rate Cut: Nasdaq Hits New High

US equity markets reversed losses from the previous week as investors reacted to Trump’s victory and Thursday’s Fed rate cut. The Nasdaq Composite Index surged 5.74%, reaching an all-time high of 19,319. The Dow and the S&P 500 also posted solid gains of 4.61% and 4.66%, respectively.

US Presidential Election Boosts Market Sentiment: FED Signals Confidence

Trump’s clear win in the US presidential election boosted demand for US-listed stocks. The US Federal Reserve added to the bullish mood by cutting interest rates on November 7. Fed Chair Powell spoke positively about the US economy, aligning with expectations for a soft US economic landing, further lifting market sentiment.

China Economic Data Shows Signs of Growth

China’s Caixin Services PMI rose from 50.3 in September to 52.0 in October. The upswing in service sector activity and the manufacturing sector’s return to expansion gave indications that stimulus measures were taking effect.

Trade data from China also raised hopes that the economy gathered momentum at the turn of the quarter. Exports increased by 12.7% year-on-year in October, sharply higher than a 2.4% rise in September.

The positive economic indicators coincided with expectations for further stimulus measures, targeting demand.

China’s Standing Committee National People’s Congress Announces Fresh Policy Measures

On Friday, November 8, the Standing Committee National People’s Congress announced stimulus measures to bolster China’s economy.

Christophe Barraud shared details of the latest measures, saying,

“China announced a 10 trillion yuan ($1.4 trillion) program to refinance local government debt, as Beijing rolls out more measures to support a slowing economy facing new risks from the reelection of Donald Trump.”

Barraud also gave insights into the next steps, saying that China also plans to introduce policies to stabilize the real estate market.

However, Beijing stopped short of introducing measures to boost consumer consumption, weighing on stocks listed in HK and Mainland China.

Hang Seng Index and Mainland China Markets Advance Despite Tariff Fears

The Hang Seng Index ended its four-week losing streak by rising 1.08%. Upbeat data from China, stimulus hopes, and the Fed rate cut drove buyer demand for real estate and tech stocks.

The Hang Seng Mainland Properties Index and the Hang Seng Tech Index (HSTECH) ended the week up 4.11% and 2.45%, respectively. Tech giants Baidu (9988) and Tencent (0700) gained 0.68% and 0.84%, respectively, while Alibaba (9988) declined by 1.05%.

Concerns about the impact of Trump tariffs on China’s economy also influenced the demand for HK-listed tech stocks.

On the Mainland, the upbeat data and policy measures delivered more meaningful gains. The CSI 300 rallied 5.50%, while the Shanghai Composite gained 5.51%.

Commodity Markets: Crude Oil, Iron Ore, and Gold

Commodity markets had another mixed week. Iron ore spot declined by 0.36% in the week. Gold also faced losses, falling 1.90% as investors reacted to Trump’s victory.

However, WTI Crude Oil advanced by 1.28%, with the US presidential election and Hurricane Rafael pushing prices higher.

ASX 200 Recovers as Banking, Mining, and Tech Sectors Lead Gains

The ASX 200 gained 2.17% in the week ending November 8, reversing a 1.13% loss from the previous week. Banking, mining, and tech stocks led the weekly gains. The S&P/ASX All Technology Index jumped 5.00%.

In contrast, Northern Star Resources Ltd. (NST) slid by 4.49% as gold prices declined.

Nikkei Index Rallies on USD/JPY Strength and Tech Sector Gains

In the week ending November 8, the Nikkei Index increased by 3.80%. Despite a modest weekly decline, the USD/JPY held onto the 152 level, supporting demand for export stocks. Tech stocks benefitted from the Fed rate cut and the Nasdaq’s trends.

Tokyo Electron (8035) advanced by 3.40%, while SoftBank Group Corp. (9984) rose by 4.51%. However, Nissan Motor Corp. (7201) slid by 4.23% after a lower profit outlook, scrapped midterm plan, and job cuts.

Outlook

Key upcoming events, including China’s inflation figures, crucial US economic data, and central bank forward guidance, will likely affect market risk sentiment. Follow our latest updates to stay informed and manage your risks effectively.