The Hang Seng Index opened 1.68% lower, while the Hang Seng Tech Index fell 2.78%. In market movements, aluminum stocks showed strength, with CHINAHONGQIAO rising over 6% and CHALCO gaining more than 5%. Technology and internet stocks declined, with Alibaba dropping over 3%.
Regarding the outlook for Hong Kong stocks, Goldman Sachs' chief China equity strategist stated that international investor interest in Chinese stocks may have climbed to its highest level in recent years. Only about 10% of surveyed clients now consider the Chinese market "un-investable," a significant improvement from approximately 40% two years ago. Goldman Sachs maintains an overweight recommendation on Chinese stocks (both A-shares and H-shares) and believes A-shares offer a higher Sharpe ratio in the near term.
China Securities Co., Ltd. suggests that geopolitical conflicts have triggered short-term adjustments in global financial markets, and the current sentiment-driven sell-off has been relatively thorough. If the situation does not escalate further, the market is expected to quickly return to its medium-to-long-term trend dominated by domestic economic conditions, policies, and liquidity. Future focus should be on a dual-strategy layout centered on景气 (prosperity) and certainty. The景气 theme benefits from accelerated capital expenditure in AI computing (core stocks), while the certainty theme's core is the HALO trade.
Huaan Securities indicated that overseas tariff risks continue to accumulate, US-Iran conflicts remain unresolved, and inflation concerns are pushing the Federal Reserve towards a noticeably more hawkish stance. Domestically, the likelihood of new incremental policies is low due to relatively strong economic data. The market is expected to continue its weak and volatile trend. In terms of allocation, short-term dividend assets like banks and utilities, along with sectors with price increase catalysts such as chemicals, machinery, equipment, and memory storage, are expected to perform well. The growth style remains the core medium-term theme but is still in a short-term adjustment phase. As the market is anticipated to enter a second phase of bull market driven by earnings after this adjustment, the current correction is viewed as a healthy one.
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