The trend of Hong Kong stocks is affected by US stocks and A shares. The recent rebound in US stocks has not boosted A shares and Hong Kong stocks. Instead, the stock markets in the two places have fallen, reflecting the cautious attitude of funds.
The picture below shows the constituent stocks of the Hang Seng Technology Index (HSTECH). The data comes from the Hang Seng Index official website and is updated on September 30, 2022. After adjustment, the three companies with the largest proportions since October are: Meituan, Tencent Holdings and Alibaba.
market atmosphere
Hong Kong stocks continued to be affected by both mainland and overseas factors. Overseas stocks led by US stocks rebounded, while mainland stocks and Hong Kong stocks fell, reflecting the cautious attitude of foreign investors.
Overseas, last Friday, the Fed officials released the wording of “slowing down interest rate hikes”, which attracted the attention of stock market bulls. The Bank of Japan’s intervention in the foreign exchange market caused the dollar to fall, and the new British Prime Minister candidate was about to be determined. European and American stock market sentiment rebounded. This is conducive to the short-term recovery of the global stock market, but A shares and Hong Kong stocks failed to follow. Investors await next week’s Fed rate decision guidance, while focusing on this week’s earnings reports from major tech stocks such as Apple, Amazon, and Google, which will guide short-term sentiment.
On the mainland, the offshore RMB touched 7.3, and the depreciation of the exchange rate is not conducive to the performance of A shares and Hong Kong stocks; the CCP’s “Twenty National Congress” successfully concluded without specific policy guidelines. Market sentiment in the Mainland and Hong Kong remained sluggish.
On a deeper level, the crash-like decline of Hong Kong stocks stemmed from the outflow of foreign capital. Foreign capital has always played an indispensable role in A-shares and Hong Kong stocks. The main buyers of A-share heavy stocks are foreign capitals. Today, Moutai fell by 7%, which was caused by the sell-off of foreign capital, which directly brought down the index and market sentiment; As an international financial center, the performance of foreign capital directly affects the stock market. In recent years, due to various reasons, the signs of international capital outflow from Hong Kong are particularly obvious, causing Hong Kong stocks to continue to decline.
The collapse of the stock markets in the two places on the one hand suggests that the strong dollar’s suppression of RMB and Hong Kong dollar assets is still ongoing, and funds are more willing to choose high-yield dollar assets; on the other hand, the United States has stepped up its pressure on China, and the new leadership of the CCP The policy inclination is not yet clear, and investors tend to avoid risks. Once the Sino-US situation becomes clear and the central government issues policies, foreign capital will re-establish positions at a low level.
The sharp decline in heavyweight stocks such as Alibaba and Tencent has driven the Hang Seng Technology Index to fall below the 3,000 mark. In the future, the trend of US technology stocks and Hong Kong stocks will continue to guide the performance of HSTECH.
Are Hong Kong stocks really in a bear market? What to do with positions held at high levels?
Chart trend
HSTECH continues its downward trend. After breaking below the 3000 mark, the short-term trend is hard to say optimistic. At present, the Hang Seng Technology Index itself has limited reference, and it is advisable to pay attention to the performance of US stocks, Hong Kong stocks and heavyweight stocks. Returning to the top of 3000 is expected to confirm the rebound, looking back at 3300-3500, and breaking below 2800 will further see as low as 2500.
Strategy
In the long run, the valuation of Hong Kong stocks is relatively low, and the Hang Seng Technology Index also concentrates the best technology stocks in Hong Kong. It is the best choice to buy the Hang Seng Technology Index ETF. However, the market as a whole continues to be affected by macro and its own factors. good. “Investment is against human nature”, and in the long run, the market decline is a good opportunity to accumulate chips. It is worth noting that before the global stock market as a whole bottoms out, the current fixed investment ideas and fixed investment scale should remain unchanged, and it is not appropriate to stop fixed investment or increase holdings in the middle.
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(by Arthur)
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