October 31, 2019 / 8:30 AM / a month ago

Hong Kong stocks end firmer after interest rate cut

* HK->Shanghai Connect daily quota used 7.1%, Shanghai->HK daily quota used 1.7%

* HSI +0.9%, HSCE +0.5%, CSI300 -0.1%

* FTSE China A50 +0.1%

Oct 31 (Reuters) - Hong Kong stocks closed higher on Thursday after the island city’s central bank cut interest rates, mirroring the U.S. Federal Reserve’s rate-cut announcement on Wednesday.

** The Hang Seng index rose 0.9% to 26,906.72, while the China Enterprises index gained 0.5% to 10,533.24.

** The Hong Kong Monetary Authority (HKMA) lowered its policy rate by 25 basis points to 2% on Thursday, following the U.S. central bank’s move to cut rates for the third time this year. The city’s policy moves lock-step with the United States as its currency is pegged to the greenback at 7.75-7.85 per dollar.

** The head of Hong Kong’s central bank called on the public to manage financial risks prudently on Thursday, as the local economy faces its first recession in a decade.

** The island city recently rolled out policies to underpin faltering growth, including cutting banks’ capital buffer and supportive measures for small businesses, and is expected to do more amid the months-long protests.

** Meanwhile, the Trump administration still expects to sign an initial trade agreement with China next month despite the cancellation of the APEC summit in Chile, while Chinese officials voiced optimism that Beijing and Washington can find a way to clinch the so-called Phase One trade deal next month.

** Beijing could remove extra tariffs imposed since last year on U.S. farm products to ease the way for importers to buy up to $50 billion worth, rather than direct them to buy specific amounts, the head of a government-backed trade association said.

** In China, data showed factory activity shrank for the sixth straight month in October and by more than expected, raising hopes of more stimulus to bolster the economy amid the bruising and protracted trade war.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.43%, while Japan’s Nikkei index closed up 0.37%.

** The yuan was quoted at 7.037 per U.S. dollar at 08:10 GMT, 0.27% firmer than the previous close of 7.056.

** About 1.91 billion Hang Seng index shares were traded, roughly 136% of the market’s 30-day moving average of 1.40 billion shares a day. The volume traded in the previous trading session was 1.55 billion.

** At close, China’s A-shares were trading at a premium of 29.79% over Hong Kong-listed H-shares. (Reporting by the Shanghai Newsroom; Editing by Shounak Dasgupta)

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