As market expectations for a shift in the Federal Reserve's monetary policy intensify, global capital markets are entering a new window of sentiment repair. Currently, market attention is highly focused on the Fed's final interest rate meeting for 2025, scheduled for December 10 local time. According to the latest statistics from the CME FedWatch Tool, the market's predicted probability of the Fed initiating a rate cut at the December meeting has climbed to a high of 87.4%, a significant increase from the same period last month. International renowned investment bank Goldman Sachs clearly stated in its latest report that the Fed starting the rate-cutting cycle in December is "almost without a doubt," further strengthening the market's consensus expectation for a monetary policy shift.
Against the backdrop of ongoing rate cut expectations, the Hong Kong stock market performed notably well in early trading today, with major indices collectively opening higher. Specifically, the Hang Seng Index and the Hang Seng Tech Index both rose by over 1% intraday, showing strong momentum for a rebound. At the individual stock level, heavyweight stocks such as Alibaba, Tongcheng Travel, Zijin Mining, and JD Health led the gains, becoming important drivers pushing the indices higher. Meanwhile, exchange-traded funds focused on the tech sector were also active. The Hang Seng Internet ETF (513330) rose over 1% intraday, and the Hang Seng Tech Index ETF (513180) also gained nearly 1%, reflecting a recovery in capital allocation enthusiasm for the Hong Kong tech sector.
This round of market sentiment repair is no coincidence. In its latest market commentary, China Merchants Securities pointed out that the recent overshooting in the Hong Kong stock market is mainly due to the combined effect of two factors: on one hand, sentiment fluctuations from the US stock market, triggered by "rate cut disagreements and AI bubble theories," spilling over into the Asia-Pacific market; on the other hand, technical pressure from some funds choosing to take profits towards the year-end. The institution believes this round of adjustment is more of a phased, irrational panic rather than a fundamental change in the basics.
Notably, as the Fed's policy stance gradually turns dovish and the probability of a December rate cut continues to rise, positive signals are emerging indicating a marginal easing of the external pressures that have plagued the market. Historical experience shows that shifts in the Fed's monetary policy cycle often have a profound impact on global liquidity conditions, particularly playing a significant role in promoting the valuation repair of emerging market assets. Currently, the market is reassessing the allocation value of Hong Kong stocks, especially sectors with long-term growth logic like technology, internet, and biopharmaceuticals.
Analysts further point out that if the Fed starts cutting rates in December as expected, it could trigger a wave of global capital reallocation. In this context, the Hong Kong stock market, with its valuations at historically relatively low levels and high sensitivity to liquidity changes, is expected to attract more attention from international investors. Simultaneously, as the mainland's economic stabilization policies continue to exert force, the fundamental performance of Hong Kong-listed companies is expected to improve further, thus creating a dual drive of valuation repair and earnings growth.
Overall, the market is currently in an important policy observation window. The decision from the Fed's December interest rate meeting will not only affect short-term market trends but may also set the tone for the allocation direction of global major asset classes in 2025. As monetary policy expectations gradually become clearer, market sentiment is expected to continue repairing. Investors should closely monitor the subsequent evolution of the Fed's policy path and its potential impact on various asset prices.
