China, Hong Kong Stocks Rise on Ceasefire, Fed Hopes

Post by : Bandanpreet Kaur

Stocks in Mainland China and Hong Kong moved up slightly on Wednesday. This happened because people around the world felt more hopeful after a ceasefire between Israel and Iran. There was also growing belief that the U.S. Federal Reserve might cut interest rates sooner than expected, which helped boost investor confidence.

The ceasefire was brought about by U.S. President Donald Trump. On Wednesday, both Iran and Israel seemed to be sticking to the agreement, and it looked like their air attacks had stopped for now.

Experts at UOB (United Overseas Bank) said that the situation between Iran and Israel will continue to be closely watched. Financial markets are staying hopeful that this fragile peace will last.

By the middle of the day:

• The Shanghai Composite Index went up by 0.28% to 3,430.16 points.

• The CSI300 Index, which tracks major companies, rose by 0.35% to 3,917.59 points.

Defense-related companies did very well in morning trading. Their stock prices increased by 3.42%. But, oil-related companies didn’t do so well. Since the fighting in the Middle East stopped, oil prices dropped, and energy company stocks fell by 2.09%.

China’s Premier, Li Qiang, also spoke on Wednesday. He said he believes China can keep growing at a good speed. He also said the country is working to shift from being mostly a manufacturing-based economy to one that focuses more on what people buy and use.

Over in Hong Kong:

• The Hang Seng Index went up by 0.77% to 24,362.73 points.

• The Hang Seng China Enterprises Index rose by 0.68% to 8,820.35 points.

In the United States, Jerome Powell, the head of the Federal Reserve (often called the Fed), made a statement on Tuesday. He warned that new tariffs could push up prices by this summer. This period is very important because the Fed is thinking about whether or not to cut interest rates.

Even though Powell said there’s no rush to lower rates, he did leave the door open for cutting them sooner—if inflation stays under control. Analysts from OCBC (Oversea-Chinese Banking Corporation) mentioned that Powell was careful not to promise any specific timeline.

For Hong Kong, this is important. That’s because its stock market reacts strongly to changes in global interest rates. If the Fed cuts rates, it could help Hong Kong markets grow even more.

China stock market