Chinese stocks rise on Fed minutes
Maybe it was the Fed’s fault after all.
Chinese stocks shot up Friday, along with most global markets, as expectations grew that the US Federal Reserve will not raise interest rates in December.
The Fed released the minutes of its September policy meeting on Thursday. In them, the Fed said the members of the Federal Open Market Committee, its policy board, believe economic conditions warrant keeping interest rates low.
The Shanghai Stock Exchange Composite Index gained 1.3% to 3,183 and the Shenzhen Stock Exchange Composite Index jumped 1.5% to 1,812. The small-cap Chinex Price Index rose 1.2% 2,217 and the Hong Kong benchmark, the Hang Seng Index, added 0.5% to 22,349.
“The chance of a US interest rate rise this year is getting slimmer,” Alex Kwok, chief analyst and head of research at China Investment Securities (HK), told Reuters. Another reason for the rally, said Kwok, was the expectation that the government will release more stimuli.
With worries about the Fed out of the way, the market can now focus on the September economic data expected to hit the market over the next two weeks.
Adding to the enthusiasm on the market, were comments by the media that about 60% of China’s listed companies expect to post a profit in the third quarter.
Earnings season in China kicked off Friday with a report Shandong Wohua Pharmaceutical. The Shenzhen listed company reporting a 252% surge in profit.