Hong Kong stocks at fresh 22-month high despite Moody's downgrade

Hong Kong shares followed Asian markets higher on Thursday, even after Moody's downgraded Hong Kong's local and foreign currency issuer ratings shortly after cutting China's ratings on Wednesday.

Asian shares scaled two-year highs on Thursday after the U.S. Federal Reserve signalled a cautious approach to future rate hikes and the reduction of its $4.5 trillion of bond holdings.

The Hang Seng index rose 0.8 percent, to 25,630.78 points, while the China Enterprises Index gained 1.7 percent, to 10,571.60 points.

Hong Kong stocks were also aided by the strength in the mainland market, as the blue-chip CSI300 index posted its best day in 21 months amid growing hopes that global index provider MSCI Inc will add mainland shares to its benchmark next month.

Investors shrugged off China's credit downgrade after several senior government officials in Beijing criticised the decision. Hong Kong's ratings downgrade had a similarly subdued effect on investors.

Analysts expect strong money flows from the mainland via the stock connect to help lift Hong Kong stocks, in particular those A+H dual listed companies and other industry-leading domestic companies listed in Hong Kong including Tencent.

The southbound legs for the stock connect will be closed during May 25-30 for the Dragon Boat Festival.

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)