Entering the Christmas-New Year’s Day holiday, market volatility has slowed down, and unless there is an unexpected news, the Hang Seng Technology Index is mainly led by the Chinese market.
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.
Volatility in global financial markets slowed as traders entered holiday mode due to the Christmas-New Year’s holiday. During this period, the Chinese market opened normally, affecting the performance of the Hang Seng Technology Index.
Overseas, the US inflation situation has improved in the past 12 months, and the Federal Reserve has slowed down the pace of raising interest rates, but warned that interest rates may be higher and the rate hike time may be longer. Due to the large rebound in the previous period, the expectation of slowing down interest rate hikes was not enough to push the stock market to continue to rise. However, due to the weak economic data in the United States, investors were more worried about the recession of the US economy, and the US stock market turned around and fell. As for U.S. stocks first, overseas stock markets were more strongly stimulated by the marginal slowdown of the Federal Reserve’s monetary policy and performed better than U.S. stocks.
On the mainland, market sentiment continued to be suppressed by the increase in the infection rate after the sudden lifting of the epidemic, because the soaring infection rate affected social stability and economic operation, posing a great test to the medical system. The throes of the economy are happening, and short-term sentiment tends to be conservative. Investors can only wait for the formation of an immune barrier, and it is unknown how long it will take. The constituent stocks of the Hang Seng Technology Index include a number of large platform companies, most of which are involved in the consumer sector, and the increase or decrease in their business volume will be transmitted to the Hang Seng Technology Index through the stock price.
A mature trading system should include trading methods, namely trading rules, fund management and trading habits. From theory to actual combat, from elementary to advanced, use the Dailyfx trading guide to extract your own trading thinking system, and then choose what you can use to perfect and achieve your own trading ability.
HSTECH maintains a low rebound, and the current main support is still at 4000. In the short term, the possibility of falling below 4000 again cannot be ruled out. If so, it may return to 4000-3500 and fluctuate with the development of the epidemic situation. If the market outlook is stable above 4000, it still tends to be bullish to 4500-4800; once it falls below 3500, it will face the risk of dropping 3000 again.
In the long run, the valuation of Hong Kong stocks is low, and the Hang Seng Technology Index has concentrated Hong Kong’s best technology and Internet stocks. 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 fixed investment has already made a profit in the early stage, but it is still at a low level. Holders need to be firm in their fixed investment thinking and wait for the market to rise further.
Follow me on Twitter @ArthurZ22426704
The outlook for the first quarter of 2023 was launched this week. What will be the difference in the market compared with 2022? The latest just because you can’t miss it!
The content on this web page is general market commentary only and may not constitute investment advice of any kind (tax, legal, accounting). This article does not constitute a direct investment invitation or recommendation for specific financial products. The content is for reference only. Readers should not rely on the information herein, nor should their actions or omissions be relied upon. We are not responsible for the results of any person’s actions or omissions based on this article. We make no warranties as to the accuracy of the content or suitability of the information provided. This article is not intended to be disseminated within the territory of the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for that matter), except as permitted by the applicable laws of the People’s Republic of China.
Copyright statement: Unless it is for browsing the information on this website, or in accordance with the applicable laws or the terms and conditions, without our specific written permission, no one may copy, usurp, upload, link, or publicly demonstrate to a third party in any way , distribute or transmit any information or content on this website. For unauthorized reprinting of infringements, we reserve the right to further pursue the legal responsibility of the relevant actors. If you have business cooperation needs such as marketing, resource exchange, etc., please contact us.