Hong Kong banking stocks advanced in late trading, with Standard Chartered PLC (ASX: 02888) rising 3.06% to HK$235.6, while HSBC Holdings PLC (ASX: 00005) gained 1.73% to HK$152.5. BOC Hong Kong (Holdings) Ltd. (ASX: 02388) climbed 1.19% to HK$51.1, and Dah Sing Banking Group Ltd. (ASX: 02356) edged up 0.49% to HK$14.39.

On the news front, reports today indicated that some banks have recently actively raised mortgage rebates to 2% and 2.5%, noticeably above market levels. Wong Mei-fung, Managing Director of Centaline Mortgage, said that banks raising mortgage rebates helps efficiently attract mortgage customers and target client groups, and she expects more banks to raise mortgage rebates to enhance market competitiveness.

HSBC said in a research report that against the backdrop of rising interest rates, weakening market activity, and tightening regulation, it prefers local Hong Kong banks over non-bank financial stocks, as banks can directly benefit from rising net interest income while asset quality risks remain manageable. The bank noted that investors are questioning why Hong Kong banks kept the Hong Kong dollar prime rate unchanged after the Federal Reserve raised rates by 25 basis points in September. It believes there is limited incentive for Hong Kong banks to raise the prime rate. If the Federal Reserve further raises rates from the fourth quarter of this year through 2027, the bank expects Hong Kong dollar interest rates to move higher, which would benefit banks' net interest income.