Market Insight | Hengke Index widens its decline by over 5% in the final trading session, with all major tech stocks plummeting. Alibaba-W drops nearly 6%
Hengkai saw its intraday decline widen by more than 5%. Among its constituent stocks, heavyweight tech stocks all suffered heavy losses. As of the time of publication, Alibaba-W dropped by 5.94% to HKD 98.95, while Tencent fell by 5.09% to HKD 413.8. On the news front, the recent strength of the US dollar continues due to changes in market expectations for the Fed's interest rate cut prospects. Previously, the market had expected the Fed to cut rates by another 50 basis points in November. However, a series of data including employment and inflation quickly cooled this expectation. Currently, the probability of a 25 basis point rate cut by the Fed in November has risen to 95.6%. Analysts point out that if the Fed's rate cut weakens, the US dollar index is likely to remain temporarily strong. Open Source Securities stated that during the National Day holiday in 2024, the slope of the rise in Hong Kong stocks and Chinese concept stocks, as well as the trading volume, exceeded the expectations of most investors. The funding pressure first forced short positions to cover, followed by institutional allocation driving. The rapid rise in the short term followed by a pullback adjustment is a normal profit-taking behavior; the medium-term trend of financial reform may continue; in the long term, it will take more than six months to validate the policy transformation and improvement in fundamental data. If the fundamental reversal logic is realized and more active long-term funds are attracted back, the Hong Kong stock market still has considerable upside potential
According to the Wise Finance APP, Hengke's intraday decline expanded by more than 5%. Among the constituent stocks, heavyweight technology stocks all plummeted. As of the time of publication, Alibaba-W (09988) fell by 5.94% to HKD 98.95, while Tencent (00700) fell by 5.09% to HKD 413.8.
On the news front, due to the change in market expectations for the Fed's interest rate cut prospects, the US dollar has been continuously strengthening recently. Previously, the market had expected the Fed to cut interest rates by another 50 basis points in November. However, a series of data including employment and inflation quickly cooled this expectation. Currently, the probability of a 25 basis point rate cut by the Fed in November has risen to 95.6%. Analysts point out that if the Fed's rate cut weakens, the US dollar index is likely to maintain its temporary strength.
Open Source Securities pointed out that during the National Day holiday in 2024, the rising slope and trading volume of Hong Kong stocks and Chinese concept stocks exceeded the expectations of most investors. The funding pressure first forced short positions and then drove institutional allocation. The rapid rise in the short term was followed by a normal profit-taking adjustment; the medium-term trend of financial reform may continue; in the long term, it will take more than half a year to verify the policy transformation and improvement in fundamental data. If the fundamental reversal logic is realized and more active long-term funds are attracted, the Hong Kong stock market still has significant upside potential