Hong Kong stocks performed well at the beginning of the new year. China continues to relax restrictions on the movement of people from Hong Kong and Macau, and economic momentum and valuation restoration expectations are attracting buyers. In the short term, it may still be disturbed by the Fed’s interest rate hike, but the mid-to-long term marginal effect is significantly reduced.
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.
After the New Year’s Day holiday, the market has gradually returned to volatility. In addition to the impact of the US stock market and the mainland market, the Hong Kong stock market itself also needs to recover, and the trend is more active than other markets.
Overseas, the market continued to track the Fed’s monetary policy and the progress of the US recession. Investors are very sensitive to the Fed’s hawkish attitude again. At the same time, weakening economic data has raised market concerns about a slowdown in the US economy or even a recession. To a certain extent, the weakening momentum of US stocks will affect the performance of Hong Kong stocks, but only in the short term. In the long run, against the background that the Federal Reserve may end its interest rate hike this year, the marginal impact of a strong dollar is weakening.
On the mainland, China continues to relax restrictions on the two-way movement of people from Hong Kong, Macau and the mainland, which has stimulated Hong Kong’s economic expectations. At the same time, the peak of the first wave of epidemics in mainland China is passing. The traditional Lunar New Year is coming, and consumption is expected to be strong, further pushing up the industry Giants, and then stimulate the stock index to rebound. From a general point of view, the worst state of Hong Kong stocks has passed, and market sentiment has entered a recovery period.
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HSTECH maintains a low rebound, the short-term support is at 4200, and it is strongly bullish above 4000. The target of the market outlook is 4800-5000. Heavyweight stocks such as Tencent and Alibaba are also recovering, and the rise in their share prices will continue to be positive for the Hang Seng Technology Index.
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, the economic momentum has re-gathered, and the market trend is returning to the wind. 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.
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