Hong Kong stocks experienced a significant rally on Friday, surging over 3% as traders responded positively to new measures from China aimed at stimulating the economy and data indicating stronger-than-expected growth.
The Hang Seng Index rose 3.61%, adding 725.01 points to close at 20,804.11. Similarly, the Shanghai Composite Index climbed 2.91%, increasing by 92.18 points to reach 3,261.56, while the Shenzhen Composite Index on China’s second exchange gained 4.09%, up 74.98 points to 1,906.86.
China’s economy expanded by 4.6% year-on-year in the third quarter, slightly down from 4.7% in the previous quarter but exceeding forecasts in an AFP survey. Traders welcomed this news alongside announcements from the People’s Bank of China (PBOC), which introduced a new facility to enhance liquidity and encourage share buybacks.
PBOC Governor Pan Gongsheng indicated that officials are also contemplating a reduction in the reserve requirement ratio for commercial lenders, which could further stimulate lending.
In a related move, state media reported that major banks had lowered interest rates on yuan deposits for the second time this year, aimed at bolstering lending as the economy seeks to regain momentum. This positive sentiment was reinforced by data showing that retail sales—a key indicator of consumer spending—along with industrial output, rose more than anticipated in September.
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