Understanding the Market | Tech stocks expanded their gains in the late trading session as uncertainties surrounding the U.S. election were eliminated. Institutions believe that both profitability and liquidity expectations for the sector are likely to improve
Tech stocks expanded their gains in the closing hours, with MEITUAN-W rising 5.65%, KUAISHOU-W up 2.92%, Tencent increasing by 2.05%, and Alibaba-W rising 1.69%. With the results of the U.S. election confirmed, market risk assessments have been downgraded, indicating an upward trend in the future. Institutions believe that investment in the internet sector should focus on overseas gaming, AI, and cloud service demand. Domestic policies are boosting confidence, with expectations of increased economic policy support and potential interest rate cuts by the Federal Reserve, which may help improve liquidity in the Hong Kong stock market in the short term, with the technology and pharmaceutical sectors likely to benefit first
According to Zhitong Finance APP, the tech stocks saw an expanded increase in the late trading session. As of the time of publication, Meituan-W (03690) rose by 5.65% to HKD 200; KUAISHOU-W (01024) increased by 2.92% to HKD 52.8; Tencent (00700) climbed by 2.05% to HKD 428.4; Alibaba-W (09988) went up by 1.69% to HKD 96.
On the news front, the U.S. election has concluded, with Trump returning to the White House after four years. Guojun International believes that with the U.S. election results settled, the risk assessment of the Hong Kong stock market has been revised downwards, and the future trend of the Hong Kong stock market is expected to be upward, with greater price elasticity in interest rate-sensitive sectors. Guoyuan International points out that current investment targets in the internet sector should still focus on overseas gaming, the implementation of AI scenarios, and the recovery of cloud service demand.
Everbright Securities notes that on one hand, domestic policies are actively boosting investor confidence, and expectations for further economic support policies are rising, which is likely to continue improving the expectations on the Hong Kong stock market's fundamentals. On the other hand, the Federal Reserve may still have two rate cuts this year, which would help improve liquidity on the denominator side of the Hong Kong stock market in the short term, providing positive support. Sectors with high financing demand, such as technology and pharmaceuticals, may benefit first from reduced financing costs, making them more likely to see a significant rebound. Historically, during the Federal Reserve's rate-cutting cycle in 2019, the Hang Seng TECH Index experienced greater increases and certainty compared to the Hang Seng Index