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China, HK stocks jump over 1% as U.S. rate-hike bets ease

08/11/2022 | 01:03am

SHANGHAI, Aug 11 (Reuters) - China and Hong Kong stocks tracked global markets higher on Thursday, as softer-than-expected U.S. inflation data prompted bets of less aggressive rate hikes from the Federal Reserve.

** Sentiment was also aided by a sharp rebound in Chinese property shares, after Longfor Group Holdings denied rumours that it had missed payment on commercial paper.

** China's blue-chip CSI300 Index rose 1.5%, while the Shanghai Composite Index gained 1.2%.

** Hong Kong's stock benchmark Hang Seng bounced 1.8%, after falling to three-month lows in the previous session.

** Slowing U.S. inflation may have opened the door for the Federal Reserve to temper the pace of interest rate hikes, easing the pressure of capital outflows from emerging markets, including China.

** "Slower place of U.S. rate hikes is good news for growth stocks such as major Internet firms," said Linus Yip, chief strategist at First Shanghai Group. The Hang Seng Tech Index jumped 2.7%.

** China stocks also benefit from signs of recovering risk appetite, as outstanding margin loans rose to a four-month high of 1.63 trillion yuan ($241.88 billion).

** But trading in Hong Kong remains tepid, which could limit the strength of the rebound, Yip added.

** Property shares in both China and Hong Kong rebounded on Thursday, led by a surge in Longfor.

** The Chinese developer said late on Wednesday that its commercial paper dues had been settled without any deferred payment, refuting rumours of its default.

** Shares of Alibaba gained roughly 3% in Hong Kong, despite plans by SoftBank Group Corp to slash its stake in the Chinese tech giant. Investors are relived that the Japanese conglomerate will use a derivative called "prepaid forward contracts", rather than directly selling shares in the market.

(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips)

Reuters 2022
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