Reasons for the sharp decline in the Hong Kong stock market!
$Tesla (TSLA.US)$ $TENCENT (00700.HK)$ This week, Hong Kong stocks continued the volatile trend from last week. On Monday, it opened significantly lower at 21,086 points, marking the low point of this round of correction, followed by a weak rebound. Although there was a temporary counterattack on Thursday, it was suppressed again on Friday.
On Friday, the Hang Seng Index plummeted by 2%, with the Hang Seng Tech Index dropping even more by 4.58%, breaking below the 4400 level and retreating nearly 10% from its high point. Fortunately, the trading volume did not significantly increase.
The trigger for the plunge in Hong Kong stocks on Friday was due to developments in the United States. The New York Times reported that the US government is considering implementing new regulations to restrict American companies from providing funding to Chinese companies developing advanced technology. This precise hit affected network technology stocks significantly, causing a sharp decline in Hong Kong's technology stocks.
The lower opening of Hong Kong stocks on Friday was already affected by the decline in US stocks the night before. In the US, Tesla's stock price surpassed $200, doubling from this year's low point, signaling that the sentiment for US stocks in this round of recovery has likely reached its peak. Furthermore, the US is facing a dilemma of not being able to raise interest rates to curb inflation without risking an economic recession.
Currently, the yield on 2-year US Treasury bonds is 4.49%, while the 10-year yield is 3.69%. The yield curve inversion, with long-term rates lower than short-term rates, is at its largest in 40 years, typically seen as a signal of an imminent economic recession.
After analyzing these external factors, the direct reason seems to be that the positive expectations from the easing of epidemic restrictions have been fully priced in. People are eager to take profits and secure their gains.
Looking at the recent trends, Hong Kong stocks may consolidate and digest between 0.02 million points to 0.022 million points, focusing on structural market movements. The potential catalysts include a surge in domestic social financing and a shift in the Federal Reserve's policy, likely around the second quarter. $Hang Seng TECH Index (800700.HK)$
On Friday, the Hang Seng Index plummeted by 2%, with the Hang Seng Tech Index dropping even more by 4.58%, breaking below the 4400 level and retreating nearly 10% from its high point. Fortunately, the trading volume did not significantly increase.
The trigger for the plunge in Hong Kong stocks on Friday was due to developments in the United States. The New York Times reported that the US government is considering implementing new regulations to restrict American companies from providing funding to Chinese companies developing advanced technology. This precise hit affected network technology stocks significantly, causing a sharp decline in Hong Kong's technology stocks.
The lower opening of Hong Kong stocks on Friday was already affected by the decline in US stocks the night before. In the US, Tesla's stock price surpassed $200, doubling from this year's low point, signaling that the sentiment for US stocks in this round of recovery has likely reached its peak. Furthermore, the US is facing a dilemma of not being able to raise interest rates to curb inflation without risking an economic recession.
Currently, the yield on 2-year US Treasury bonds is 4.49%, while the 10-year yield is 3.69%. The yield curve inversion, with long-term rates lower than short-term rates, is at its largest in 40 years, typically seen as a signal of an imminent economic recession.
After analyzing these external factors, the direct reason seems to be that the positive expectations from the easing of epidemic restrictions have been fully priced in. People are eager to take profits and secure their gains.
Looking at the recent trends, Hong Kong stocks may consolidate and digest between 0.02 million points to 0.022 million points, focusing on structural market movements. The potential catalysts include a surge in domestic social financing and a shift in the Federal Reserve's policy, likely around the second quarter. $Hang Seng TECH Index (800700.HK)$
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