Hong Kong stocks close 12.82% higher

(Xinhua)
Updated: 2008-10-30 16:54

HONG KONG - Hong Kong stocks rose 1,627.78 points, or 12.82 percent, to close at 14,329.85 on Thursday, after a half-point interest rate cut by the US Federal Reserve (Fed) overnight and a 0.27 percent benchmark interest rate cut by China' s central bank Wednesday.

Turnover totaled HK$75.12 billion (US$9.70 billion), up from Wednesday's HK$59.23 billion (US$7.59 billion).

The Fed cut a key interest rate by half a percentage point to 1.0 percent to prevent the economy from slipping into deep recession. China's central bank, the People's Bank of China (PBOC), also announced on Wednesday it would cut benchmark interest rates by 0.27 percent to spur economic growth as of October 30.

The Hong Kong Monetary Authority (HKMA) also announced Thursday that the base rate is adjusted downward to an historic low of 1.5 percent with immediate effect, following the US Federal Reserve's move.

Joseph Yam, the Chief Executive of the HKMA, said he hoped local banks would now reduce lending rates to help ease the credit squeeze, adding that the HKMA would inject more liquidity into the markets if necessary.

But Yam said the impact of the cut would take some time to filter into different sectors of the economy to benefit businesses and individual investors.