Hong Kong's leveraged ETF market experienced sharp swings this morning, with inverse products posting strong gains. As of press time, the CSOP Hang Seng TECH Index Daily (-2x) Inverse Product (07552) rose 9% to HK$2.47, the CSOP Hang Seng China Enterprises Index Daily (-2x) Inverse Product (07588) climbed 5.87% to HK$1.768, and the CSOP Hang Seng Index Daily (-2x) Inverse Product (07500) gained 5.58% to HK$2.006.
On the news front, the Hong Kong stock market opened lower and drifted further down on October 22, with all three major indices extending losses. The Hang Seng Index fell nearly 3% and briefly lost the 23,000 mark, while the Hang Seng TECH Index plunged more than 4% to a new low since September 2024.
Notably, a recent "back-tax" controversy involving offshore trusts has stirred the market. On the evening of October 19, the State Taxation Administration issued a notice stating that relevant taxpayers should complete their filing and tax payment within the transition period, namely before October 22, 2026, without incurring late payment surcharges. Earlier reports suggested that eight high-net-worth individuals could be affected.
Guoyuan International noted that the near-term baseline scenario for Hong Kong stocks remains "index consolidation with internal market divergence and sector rotation." In the technology sector, the focus should be on companies that are already profitable, have improving free cash flow, carry low leverage, and can effectively convert capital expenditure into revenue and profit. At the same time, allocations can be made to financials, utilities, and selected consumer segments with stable cash flow to reduce portfolio volatility. As the marginal momentum of southbound capital weakens, further sustained gains in Hong Kong stocks will depend more heavily on upward earnings revisions and improvements in domestic fundamentals.
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