Understanding the Market | Hang Seng Index fell by more than 7% and briefly dropped below 4800 points, with weighted technology stocks collectively declining
Hengqiang Technology fell by more than 7% in early trading, once falling below 4800 points, with heavyweight technology stocks collectively declining. Dongfang Zhenxuan fell by 18.68%, Alibaba-W fell by 6.6%, and Tencent fell by 2.94%. Analysts pointed out that the future trend of the Hong Kong stock market is influenced by A-share sentiment and the movement of the US dollar. The strengthening of the US dollar and the Federal Reserve's balance sheet reduction have led to tight offshore US dollar liquidity, which may cause volatility. Huafu Securities believes that the inflow of international intermediary funds is an important factor in the outperformance of the Hang Seng Technology Index
According to the Wise Finance APP, Hengke's morning session fell by more than 7%, and at one point fell below 4800 points. As for the constituent stocks, East Buy (01797) fell by 18.68% to HKD 23.5; Alibaba-W (09988) fell by 6.6% to HKD 107.6; Tencent (00700) fell by 2.94% to HKD 456.2.
On the news front, after a full day of soaring yesterday, Hong Kong stocks plunged unexpectedly in the morning session today, with heavyweight technology stocks collectively declining. Some analysts pointed out that the future direction of Hong Kong stocks may depend on the popularity of A-shares on one hand, and the movement of the US dollar on the other. In the recent rise of Chinese assets, the US dollar has been too strong, and the Federal Reserve is still shrinking its balance sheet. In other words, offshore US dollar liquidity is not as loose as imagined. Therefore, the aforementioned seesaw effect occurred. If Hong Kong stocks rise too much and valuations increase too quickly, volatility will naturally occur.
Huafu Securities pointed out that the rapid inflow of international intermediary funds since mid to late September is an important factor in the outperformance of the Hang Seng Technology Index. As of September 30th, the proportion of international intermediary holdings in the Hong Kong stock market was 30% in the optional consumer industry and 25% in information technology, far higher than other industries. In the Hang Seng Technology Index, the weight of the information technology industry is 50%, and the optional consumer industry accounts for 49%, also much higher than the 19% and 35% in the Hang Seng State-Owned Enterprises Index. Therefore, the bank believes that the significant inflow of foreign capital into the Hong Kong stock market since mid to late September is an important reason for the outperformance of the Hang Seng Technology Index