SHANGHAI, March 16 (Reuters) - Hong Kong’s benchmark Hang Seng Index closed at a 19-month high on Thursday after the Federal Reserve hiked interest rates, as expected, but signalled no pick-up in the pace of tightening.
Investors had feared the Fed was considering faster hikes that buoy the dollar and lure funds out of emerging markets and back to the United States.
The Hang Seng index ended up 2.1 percent at 24,288.28 points, its highest close since early August, 2015.
The China Enterprises Index gained 2.5 percent to 10,526.46 points, in its best day since May 25, 2016.
The Fed raised its benchmark policy rate by 25 basis points overnight, as widely expected.
The move was matched by Hong Kong’s central bank, as the city’s currency is pegged to the U.S. dollar, but some commercial banks kept their best lending rates unchanged.
While higher borrowing costs typically pressure rate-sensitive sectors such as property and banking, both jumped on the Fed’s benign rate outlook.
Fed policymakers maintained expectations for a total of three rate increases this year, defying predictions from some analysts that it would turn more aggressive as U.S. economic data continues to improve.
Main sectors rallied across the board, led by material and energy plays, as oil extended gains from the previous session after data showed U.S. stockpiles eased from record highs.
China Unicom jumped 5.2 percent, shaking off profit drop to settle at a near one-year high. (Reporting by the Shanghai Newsroom; Editing by Kim Coghill)