Last Friday’s US non-farm payrolls data showed that the outlook for wage inflation eased, and expectations that the Federal Reserve would continue to slow down the pace of interest rate hikes supported Hong Kong stocks to continue to strengthen.
The Hang Seng Technology Index (HSTECH) adjusts its constituent stocks at the end of each month, and the latest update time is November 30, 2022. After adjustment, the three companies with the largest proportion since December are: Xiaomi Group, Tencent Holdings and JD.com. Changes in the stock prices of these three companies have the greatest impact on the trend of the Hang Seng Technology Index.
Hong Kong stocks continue to be affected by the monetary policies of the Chinese mainland and the Federal Reserve, as well as the trend of U.S. stocks. The recent market sentiment in Hong Kong stocks is positive.
Overseas, the Fed’s interest rate hike further weakened the pressure on Hong Kong stocks. The growth rate of wages in the non-agricultural data in the United States in December showed a slowdown, suggesting that wage inflation will decline in the future, and the Fed is expected to continue to slow down the pace of interest rate hikes. After the data, US stocks rose, which directly and indirectly boosted the trend of Hong Kong stocks.
On the mainland, the peak of the first wave of infections in mainland China has gradually stabilized, and social production and life are returning to normal. As the Chinese Lunar New Year is approaching, consumption expectations are stimulated, and market buying is active. This is not only a bet on the economic outlook, but also an expectation of valuation restoration. At the same time, Jack Ma, the former president of Alibaba, quit the actual controller of the Alibaba department, reflecting that the rectification has achieved substantial results, which is conducive to platform compliance and the government’s re-inclination, which is beneficial to platform companies and the Hang Seng Technology Index.
To sum up, the large and small negative factors of the Hang Seng Technology Index continue to disintegrate, which is conducive to the continued rebound of the index.
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HSTECH continues to rebound, with support at 4200-4300, and is expected to further explore 4800-5000. It is less and less likely to fall back below 4000 in the short term. Once it falls back below this line, it will initiate a callback. The bias continues to be bullish.
In the long run, the valuation of Hong Kong stocks is relatively low, and the Hang Seng Technology Index has concentrated the best technology and Internet stocks in Hong Kong. Regular investment in the Hang Seng Technology Index ETF is the best choice. New changes are taking place in the macro fundamentals, especially the Fed’s interest rate hike expectations are weakening After the relaxation of China’s epidemic prevention and control, economic momentum has re-gathered, and the most difficult time for the Hong Kong stock market has passed. With the rebound at the bottom, the previous fixed investment has made a profit, and it is still at a low level. Hold it firmly and wait for the market to continue to rise.
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