Tech gains make difference for HK, mainland stocks

Hong Kong and mainland stocks closed higher on Wednesday, propelled by advances in technology shares, but the gains were restrained as investors remained cautious prior to the Federal Reserve's decision on interest rates. The Hang Seng Index in Hong Kong gained 46 points, or 0.2%, to 24,713 on a trading volume of HK$181.09 billion.

The tech index climbed 34.46 points, or 0.8%, to 4,325. The China Enterprises Index increased by one point to 8,206. In Shanghai, the benchmark Shanghai Composite Index rose 27 points, or 0.71%, to 3,891, while the blue-chip CSI300 index also increased by 0.7%. Both indices had ended four consecutive days of declines. The bullish trend was driven by strength in technology shares, with the ChiNext Composite index surging 63 points, or 1.96%, to 3,311, and Shanghai's tech-focused Star50 index jumping 4.1%.

The Shenzhen Component Index was up 166 points, or 1.26%, at 13,454. China's prominent newspaper, the People's Daily, published an opinion piece asserting that AI is not solely a domain of major powers, and the United States should collaborate with China to foster a risk-managed environment for balanced growth. In Tokyo, the Nikkei Index recovered from a dip to end 438 points, or 0.69%, higher at 63,923, buoyed by energy companies as oil prices surged above $100 per barrel.

The broader Topix index climbed 24 points, or 0.61%, to 4,061. Seoul's Kospi Index closed up 90 points, or 1.37%, at 6,717, ending a four-day losing streak as chipmakers rebounded. Federal Reserve Chairman Kevin Warsh refrains from offering any guidance about the potential direction of US interest rates. However, high inflation, oil prices above $100, and his focus on price stability seem to indicate that the Fed will likely raise rates again in March.

The crucial question is whether the Fed will present today's expected rate hike as a modest correction to maintain inflation credibility or the start of a more extensive tightening cycle, according to analysts at Commerzbank. US Treasury Secretary Scott Bessent announced on Tuesday that he would meet with Vice Premier He Lifeng this weekend prior to a summit between President Xi Jinping and US President Donald Trump the following week.