China and Hong Kong stocks rose sharply on Thursday, pacing gains in Asian markets, as the Federal Reserve’s decision to keep interest rates unchanged eased investor anxiety. The rally also came after robust overnight gains on Wall Street, and followed a week of extremely low volatility in mainland stocks.
“Volatility had been very low recently because investors dared not make big bets ahead of the Fed rate decision, for fear of nasty surprises,” said Wu Kan, head of equity trading at investment firm Shanshan Finance.
“Now, the uncertainty has been removed.”
China’s blue-chip CSI300 index rose 0.9 percent, to 3,295.25 points by lunch break, while the Shanghai Composite Index gained 0.8 percent, to 3,048.61 points.
Hong Kong stocks are heading for their biggest one-day rise in two weeks, with the benchmark Hang Seng index advancing 1.1 percent, and the Hong Kong China Enterprises Index adding 1.4 percent.
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The Fed left short-term rates unchanged, but signalled it could hike rates by year-end as the labour market improved further. It also cut the number of rate increases expected in 2017 and 2018, and reduced its longer-run interest rate forecast.
All major sectors gained in China and Hong Kong. China-listed developers were particularly strong, with an index tracking the sector up 3.6 percent, aided by renewed strength in bellwether Vanke.
Interest in the sector was kindled by news that Hong Kong-listed developer Sunac China Holdings plans to buy 17 percent of Jinke Property, pushing Jinke’s shares up 10 percent.
In Hong Kong, China’s railway stocks including CRRC and China Railway Group jumped after China and Thailand agreed on Wednesday to invest a total of 179 billion baht