Stocks in Hong Kong reverse three consecutive drops, boosted by weak US employment data that increases chances for a Federal Reserve interest rate reduction

The financial markets saw a mix of positive and negative movements over the past few days, with several key indices showing signs of growth.

In China, the CSI 300 Index of onshore stocks climbed a substantial 2.2%, while the Shanghai Composite Index rebounded 1.2%. This growth is likely due to the optimistic outlook on the Chinese economy, as markets are taking the recent data as evidence of a gentler landing, according to Stephen Innes, a managing partner at SPI Asset Management in Bangkok.

However, the US labor market appears to be losing steam, with jobless claims rising to their highest since June. Despite this, Innes believes the market is not stalling out, as equity traders are betting on a soft payroll print to achieve another record close. A private report showed that US payroll increases missed estimates, suggesting a potential soft reading in the official non-farm payroll report due Friday night could cement a Fed cut. Traders are pricing in a 99% probability of a quarter-point cut in the borrowing cost at the Fed's policy meeting on September 18.

Several notable companies also saw significant gains. Wharf Real Estate Investment rallied 3.9% to HK$22.62, and Hang Lung Properties advanced 6.1% to HK$8.49. The Hang Seng Tech Index added 2%, with Tencent Holdings, a significant weight on the Hang Seng Index, rising 2.2% to HK$605.50. Alibaba Group Holding also gained 1.5% to HK$131.80.

Positive sentiment also seems to be returning to the photovoltaic industry, with optimism suggesting the downturn for Xinyi Solar Holdings may be over. The company rallied 7.5% to HK$3.71.

On a global scale, the S&P 500 index rose to a record on Thursday, although the Hang Seng Index closed at 25,417.98, showing a more modest 1.4% increase.

In summary, while the US labor market shows signs of slowing down, the Chinese markets are experiencing growth, and several companies in both countries are seeing positive gains. The anticipation of a Fed cut also continues to dominate discussions in the financial world.