Hong Kong stocks near 2-month high after China cuts rates for first time in 7 months

The Hang Seng Index gained 1 per cent to 23,572.22 at 11.06am local time. The Hang Seng Tech Index added 0.9 per cent. On the mainland, the CSI 300 Index climbed 0.3 per cent and the Shanghai Composite Index added 0.2 per cent.

Morgan Stanley’s upbeat view on China’s pharmaceutical industry boosted drug makers. CSPC Pharmaceutical Group surged 6.1 per cent to HK$6.30, Hansoh Pharmaceutical Group advanced 5.1 per cent to HK$24.70 and Sino Pharmaceutical gained 3.5 per cent to HK$4.20.

Xiaomi climbed 3 per cent to HK$53.90, rising for a third day ahead of the tech firm’s unveiling of new products this week. Alibaba Group Holding rebounded 1.3 per cent to HK$120.80 after declining for three days.

The People’s Bank of China on Tuesday lowered the one-year loan prime rate (LPR) to 3 per cent from 3.1 per cent, while the five-year rate, a reference for long-term loans including mortgages, was also cut by 10 basis points to 3.5 per cent. The LPRs were last slashed by a quarter of a percentage point in October following a broad easing by the central bank.