🌟HK market recap: Where is the market going?

📈 Market Review

The Hong Kong stock market saw a significant pullback last week after a month of strong gains. $Hang Seng Technology Index (HSTECH)$ led the decline, down 7.6% last week, while real estate, health care and insurance sectors also underperformed. Meanwhile, traditional high dividend-paying sectors such as energy and utilities performed solidly.

📉 Analysis of the causes of callbacks

The pullback in the market was not surprising, especially after the large gains accumulated in the short term. Analysts noted that the market was overbought and sentiment was overdrawn, approaching the target level of 19,000 to 20,000 points.

🚀 Risk appetite repair

The main impetus for the current rally came from the repair of risk appetite, especially the fall in equity risk premiums. However, as signs of overbought emerged, market divergence and profit-taking began to increase.

🌐 Global Impact Factors

The Federal Reserve's "hawkish" stance and the strength of U.S. technology stocks, the market provides an excuse for profit-taking. At the same time, the adjustment of domestic real estate policy also had an impact on the market.

🔮 Future prospects

Analysts expect that the Hong Kong stock market may oscillate and consolidate around 18,000 points, waiting for more catalysts. Further upside for the market will depend on a further fall in risk-free rates and earnings repair.

🏢 Effect of real estate policies to be seen

Despite the recent power of real estate policy, its effect still needs time to be observed. Government storage could be the key to boosting the market.

💼 Structural opportunities

In the current market environment, it is recommended to focus on structural opportunities such as high dividend paying sectors and technology hardware and consumer electronics.

📊 Data to Watch

Hang Seng Index retreated from a high of 19,600 to 18,600
Energy and Utilities Sector Outperforms Market
Short selling turnover rate of Hong Kong stocks plummets to 12.8%
Hang Seng Index risk premium retreats to mid-2023 levels

📈 Investment Strategies

Continuing to focus on earnings growth expectations in overseas Chinese equity markets
Keeping an eye on policy changes and market sentiment
Look for companies with solid cash flow and high shareholder returns

Tech Stocks Pullback: What's Next.

After the start of the new year, tech stocks came under pressure, with IXIC dropping by 1.63%. NVDA witnessed a 2.73% decline, Meta fell by 2.17%, and both MSFT and AMZN experienced a drop of over 1%. ------------- Where might tech stocks pull back to?

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