The Hang Seng Technology Index rebounded slightly this week, which was mainly boosted by the improvement in the sentiment of US stocks; at the same time, Didi received a fine, which was good for Chinese stocks, and there was one less stumbling block on the way for HSTECH to rebound.
The constituent stocks of the Hang Seng Technology Index (HSTECH), the data is from the Hang Seng Index official website, and the update time is June 30, 2022.
The Hong Kong stock market continued to pay attention to the central government’s policies, the epidemic and the performance of the mainland stock market. At the same time, the Fed’s interest rate trend in July and the US and even global economic recession expectations continued to exert influence.
Externally, the Federal Reserve will hold the July FOMC meeting next week, and the market is betting that the probability of the Fed raising interest rates by 75 basis points is close to 100%, and the probability of raising interest rates by 100 basis points is around 30%. This week, the European Central Bank announced to raise interest rates by 50 basis points, the first rate hike in 11 years. The main reason is still inflation. European and American central banks still lead the global tightening monetary policy environment.
Short-term stock market sentiment is affected by U.S. stocks. The recently disclosed U.S. stock earnings report shows the resilience of listed companies. After the U.S. stock market has been adjusted for more than half a year, buying has begun to return. It still takes time to see whether the market bottom can be established. U.S. tech stocks remained the focus of the market, with a rebound in tech stocks boosting the Hang Seng Technology Index. More clues await after next week’s FOMC meeting.
In terms of internal trading, the market has not seen more stimulus from the central government’s policies since the third quarter. However, the epidemic has spread sporadically, which has led to profit-taking to a certain extent.
This week, the results of Didi’s punishment were released. The State Internet Information Office fined the company 8.093 billion yuan, while the chairman Cheng Wei and the president Liu Qing were fined 1 million yuan. Didi responded to the punishment, saying it “sincerely accepts and resolutely obeys.”
In early July 2021, Didi forcibly went to the United States for an IPO, and was later stopped by relevant departments. The year-long investigation process greatly impacted the already fragile Chinese concept stocks. According to the draft, Didi has 16 illegal facts, mainly Data processing activities that involve the collection of large amounts of information and affect national security. The result of this penalty is implemented and the company accepts the penalty, which means that the uncertainty is eliminated, and this matter can be turned over.
After the high-level contacts between China and the United States and the expectation that Sino-US tariffs may be cancelled, the subsidence of the Didi incident is expected to have a positive impact on the trend of the Hang Seng Technology Index.
HSTECH remains low and fluctuated as a whole, and is currently focusing on 4800-4500 finishing. If it stops falling at 4500, and then breaks through 4800, it is expected to start a new round of upward movement, looking at 5500-5800; if it breaks below 4500, it faces the possibility of returning to 4000. With the boost of US stocks, the Hang Seng Technology Index has the opportunity to fluctuate upwards.
Fixed investment strategy
In terms of strategy, in the long run, it is still the best choice to buy the Hang Seng Technology Index by fixed investment; short-term market corrections continue to provide opportunities for accumulating chips, and the fixed investment ideas and scale of fixed investment remain unchanged.
Follow me on Twitter @ArthurZ22426704
The content on this page is for general market commentary only and may not constitute investment advice of any kind (tax, legal, accounting). This article does not constitute an invitation or recommendation for direct investment in specific financial products. The content is for reference only. Readers should not rely on the information in this document, nor should its actions and 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 provided or the adequacy of the information. This article is not intended for distribution within the territory of the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for this purpose), except as permitted by the applicable laws of the People’s Republic of China.
Copyright Notice: Except for the purpose of viewing the information on this website, or as permitted by applicable law or these terms and conditions, no one may copy, use, upload, link, or publicly perform in any way to third parties without our specific written permission , publish or transmit any information or content on this website. We reserve the right to further investigate the legal responsibility of the relevant actors for the infringement of unauthorized reprinting. If you have business cooperation needs such as market promotion and resource exchange, please contact us.