Ceasefire Sparks Stock Gains as Fed Rate Cut Hopes Rise

In a positive shift for financial markets, stocks in Mainland China and Hong Kong gained on Wednesday following a ceasefire agreement between Israel and Iran, which buoyed global sentiment. The potential for an earlier-than-anticipated Federal Reserve rate cut further contributed to the optimism, with analysts keeping a watchful eye on developments.

Defence shares posted notable gains, with the respective sub-index climbing by 3.42% in morning trading. However, the energy sector faced pressure, falling by 2.09% due to declining oil prices post-ceasefire. As the day progressed, the Shanghai Composite index observed a rise of 0.28% to 3,430.16 points, while the blue-chip CSI300 index advanced 0.35% to 3,917.59 points.

In Hong Kong, the stock market mirrored these positive trends, with the Hang Seng Index rising by 0.77% to 24,362.73 points and the Hang Seng China Enterprises Index increasing by 0.68% to 8,820.35 points. Meanwhile, China's Premier Li Qiang expressed confidence in maintaining robust economic growth, transitioning from a manufacturing focus to a consumer-driven model. Additionally, Fed Chair Jerome Powell signaled potential rate cuts tied to tariffs and inflation trends, a prospect seen as beneficial for Hong Kong stocks closely linked to global monetary policy changes.

(With inputs from agencies.)