The drop in US inflation and expectations of the Fed slowing down interest rate hikes continued to boost global stock markets, while China’s relaxation of epidemic prevention and control greatly stimulated market sentiment. The offshore RMB recovered the 7.00 mark, and Hong Kong stocks and the Hang Seng Technology Index rose.
The picture below shows the constituent stocks of the Hang Seng Technology Index (HSTECH). The data comes from the official website of the Hang Seng Index, and the update time is October 31, 2022. After adjustment, the three companies with the largest share since November are: Xiaomi Group, Meituan and Alibaba.
Hong Kong stocks continue to be affected by both mainland and overseas factors. Both internal and external factors are conducive to the performance of the stock market, and the sentiment of the Hong Kong stock market is high.
Overseas, the market continued to be boosted by the cooling of US inflation and the expectation that the Federal Reserve would slow down interest rate hikes. The active performance of US stocks led to the strengthening of global stock markets. This week, Fed officials are in a quiet period and will not speak in public, and the market is still dominated by optimism. Investors await guidance from next week’s FOMC meeting.
On the mainland, various parts of China continued to adjust the epidemic prevention and control measures. Under the loose prospect, investors showed a positive attitude towards economic restart, and the market was active. This is conducive to the restoration of confidence and the re-establishment of the market valuation system. At the same time, under the influence of the weakening of the US dollar, the offshore RMB regained the 7.00 mark, which greatly stimulated the re-flow of funds into Hong Kong stocks, and Hong Kong stocks may restart their rise.
HSTECH’s low rebound has made substantial progress. As the index breaks through the 4000 mark, the bullish trend has been strengthened, and the short-term target points to 4500 and 4800. After consolidating the 4000 first-line rebound in the market outlook, it is expected to point to 5000; if it falls back below 4000, we still need to pay attention to the risk of weakening, refer to the support of 3500.
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 buying has already moved. With the rebound at the bottom, fixed investment in the early stage began to make profits. Both position holders and new entrants need to be firm in their fixed investment thinking and wait for the market to rise further.
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