On May 28, the Hang Seng Index opened 0.39% lower, while the Hang Seng Tech Index fell 0.25%. In the market, the new energy vehicle sector showed strength, with NIO-SW rising over 7% and XPeng Group gaining more than 1%. Lithium mining stocks were active, with Ganfeng Lithium up over 2% and Tianqi Lithium increasing more than 1%.
Regarding the outlook for Hong Kong stocks, Huatai Securities noted that from a short-term perspective, after the recent adjustments, market sentiment has neared panic levels, with downside risks partially released, enhancing the attractiveness for allocation. The AI chain, particularly semiconductors, remains a key sector with strong upward momentum in fundamentals. Positive developments in domestic supply chains may lead to short-term momentum-driven rallies, but the firm believes chasing such gains offers limited value. If high-risk capital opts for internal rotation, it may present opportunities for accumulation in sectors linked to overseas markets.
Dongwu Securities highlighted that the most critical focus within the Hong Kong tech sector remains the ability of the AI hardware supply chain to deliver on earnings. Additionally, despite short-term constraints from weak macroeconomic data, bottoming signs are gradually emerging in the consumer sector, offering a higher margin of safety for left-side positioning. Defensive sectors such as coal, banking, and telecom operators also provide stability.
China Merchants Securities indicated that looking ahead, the probability of Hong Kong stocks oscillating upward remains high. Current valuations in Hong Kong are relatively low compared to other major markets, providing a favorable safety margin. Although external liquidity constraints persist, with resilient US inflation and rising Treasury yields continuing to pressure growth stock valuations, Hong Kong stocks have already priced in some pessimistic expectations over the past period, limiting the potential for further significant declines.
Industrial Securities suggested that for Hong Kong stocks to form a truly sustainable index rally, more conditions need to align. Recent adjustments, particularly in the Hang Seng Tech Index, have been driven by downward revisions in earnings expectations. The index structure of Hong Kong stocks, heavily weighted in sectors like internet, consumer, finance, and automotive, is closely tied to China's credit cycle, domestic demand recovery, and consumer confidence. In the second half of the year, Hong Kong stocks may experience a period of beta-driven opportunities at the index level. As investors gain further recognition of China's economic stability and expectations for Federal Reserve rate cuts under the new leadership later in the year, it could catalyze a new round of upward momentum for the Hong Kong stock index.
Comments