SHANGHAI: China stocks closed lower on Thursday, hurt by concerns around economic recovery, while Hong Kong shares rose tracking global markets as investors bet that US interest rates have peaked.

The blue-chip CSI 300 Index and the Shanghai Composite Index were both down 0.5% at close.

Hong Kong’s Hang Seng Index added 0.8% and the Hang Seng China Enterprises Index climbed 0.9%.

Asian shares and bonds extended a global rally as a non-committal Federal Reserve Chair Jerome Powell had markets double down on bets that US interest rates have peaked and cuts are on the way.

Overnight, the Fed held its policy rate steady in the 5.25%-5.50% range. While Powell did not rule out another hike, markets judged he was not quite as hawkish as he might have been.

“This round of rate hike cycle probably have finished,” said Zhang Chi, analyst at Sinolink Securities in a note, adding it would ease the outflow pressure for China stocks.

Zhang said China growth stocks, especially healthcare companies, as well as Hong Kong-listed tech companies would benefit the most.

Tech giants listed in Hong Kong jumped 1.6%.

However, in the onshore market, most stocks fell amid concerns of a fragile economic recovery. Latest data showed China’s factory activity unexpectedly contracted in October.

“China equity investors are on the sidelines,” said UBS analysts, adding investors now expect two positive catalysts, including the meeting between China and US presidents and a cut of reserve requirement ratio during the upcoming weekend.

Shares in new energy and liquor makers were down 2% and 1.5%, respectively, while media firms added 1.8 percent.