Hong Kong stocks closed higher Friday as the latest U.S. inflation report fanned hopes of a Federal Reserve rate cut.

The Hang Seng Index rose by 192.40 points, or roughly 0.8%, to end at 25,690.53. The Hang Seng China Enterprises Index increased by 59.72 points, or nearly 0.7%, to 8,901.23.

Investor sentiment improved after cooling inflation strengthened the argument in favor of more monetary policy easing than a solo rate cut forecast for next year in the Federal Reserve's latest Summary of Economic Projections.

The consumer price index rose 2.7% year over year in November from 3% in September, according to a Thursday report from the Bureau of Labor Statistics, which could not collect survey data in October because of the federal government shutdown.

The latest print lagged the Bloomberg-polled consensus for a 3.1% increase.

The market is pricing a 47% probability of a Fed rate cut in March, up from a 40% likelihood a week ago, according to the CME Fedwatch tool. There is a 42% chance of a policy pause at the 3.5% to 3.75% target range for the fed funds rate.

In corporate news, two stock market debutants moved in opposite directions on their first day of trading.

Xizang Zhihui Mining (HKG:2546) had a stellar debut as the miner closed at HK$8.60 per share, 91% above its initial public offering price of HK$4.51.

Meanwhile, CiDi's (HKG:3881) shares had a weak start. The intelligent driving products provider closed at HK$227 per share, 14% below its offer price of HK$263.