Last updated on December 25, 2025
HONG KONG: Asian equities rallied on Tuesday, with Hong Kong stocks climbing on a wave of renewed investor optimism driven by growing expectations that the U.S. Federal Reserve is preparing to cut interest rates. A rebound in Wall Street overnight helped fuel buying momentum across the region.
The Hang Seng Index closed 0.7% higher at 24,902.53, tracking gains in the broader region. The Hang Seng Tech Index mirrored the uptick, also adding 0.7%. Onshore Chinese markets rose in tandem — the CSI 300 Index advanced 0.8%, while the Shanghai Composite Index rose 1.0%.
Among notable movers, Lenovo Group surged 5.1% to HK$11.14, after JPMorgan Chase raised its earnings forecast for the tech firm by 3%, citing strength in its core operations. Bank of China (Hong Kong) jumped 4.7% to HK$37.06, and Tencent Holdings gained 1.6% to HK$559. In contrast, Techtronic Industries edged down 0.4% to HK$94.50 ahead of its earnings announcement later in the day.
The rebound followed a recovery in U.S. stocks on Monday, where dip-buying helped claw back losses triggered by weaker-than-expected labor market data last Friday. The trend extended across Asia — Japan’s Nikkei 225 rose 0.6%, South Korea’s Kospi climbed 1.6%, and Australia’s S&P/ASX 200 added 1.2%.
Markets are now almost fully pricing in a September rate cut from the Federal Reserve, with odds exceeding 90%, according to interest-rate futures. Such a move is expected to prompt a reallocation away from U.S. high-yield assets and into riskier investments across Asia. It could also give central banks in the region more room to adopt a looser stance.
“The Fed is expected to make a quick pivot to a dovish stance,” said Xue Wei, analyst at Topsperity Securities in Shanghai. “The trading window of interest-rate cuts is now coming.”
Adding to dovish sentiment, San Francisco Fed President Mary Daly indicated that easing is likely on the horizon, citing cooling labor market conditions. She also noted, according to Reuters, that no inflationary pressure had emerged from President Donald Trump’s tariff measures.
If realized, a Fed rate cut could reinforce Hong Kong’s recent stock market rebound. The Hang Seng Index has already climbed 24% year-to-date, hitting a three-and-a-half-year high last month, boosted by gains in Chinese AI stocks and stronger-than-expected economic performance in the mainland.
Corporate earnings are now under the spotlight, with five key companies — including China Mobile and Techtronic Industries — slated to release interim results this week. So far, 13 Hang Seng-listed firms have reported, with average year-on-year profit growth of 14%, compared to 17% in the previous half-year, according to Bloomberg data.
