The Zhitong Finance App learned that Hong Kong stocks opened low under pressure in early trading, but then fluctuated and strengthened, and the three major indices became popular one after another. Among them, the Hengke Index had the strongest performance, rising 1.42% intraday. At the close, the Hang Seng Index rose 0.09% or 17.03 points to 18089.93 points, with a full day turnover of HK$95.15 billion; the Hang Seng State-owned Enterprises Index rose 0.2% to 6477.24 points; and the Hang Seng Technology Index rose 0.94% to 3689.68 points.
Guotai Jun An pointed out that with the reduction of uncertainty in China's economy and policy fields, sentiment in the Hong Kong stock market has recovered. Overseas, major central banks have cut interest rates for the first time. Although the Federal Reserve's June interest rate meeting was hawkish, the Fed's intention to care for the financial and labor markets is obvious. Some economic data shows signs of weakness, and the decline in overseas interest rates is a trend. The decline in uncertainty is particularly evident in Hong Kong stocks, and will be a key driving force for the rise of Hong Kong stocks.
Blue chip stock performance
NetEase S (09999) led the blue chip increase. At the close, it rose 6.21% to HK$150.6, with a turnover of HK$1,579 billion, contributing 9.76 points to the Hang Seng Index. According to the Jefferies Research Report, NetEase's “Eternity” mobile game will go live in public beta on July 25. According to the bank's analysis and market forecast, considering that the computer version of the game is familiar to players and that the expectations of industry insiders are also higher than the market, the first month's turnover is expected to reach about 1 billion yuan. The bank maintains NetEase's “Buy” rating, with a target price of HK$202.
In terms of other blue-chip stocks, Mengniu Dairy (02319) rose 5.02% to HK$14.64, contributing 3.54 points to the Hang Seng Index; China Biopharmaceuticals (01177) rose 4.55% to HK$2.76, contributing 2.22 points to the Hang Seng Index; Shenzhou International (02313) fell 2.48% to HK$78.55, dragging down the Hang Seng Index by 2.65 points; Sinopharm Holdings (01099) fell 2.34% to HK$20.9, dragging down the Hang Seng Index by 1.1 points.
In terms of popular sectors
On the market, most large technology stocks flourished; Kuaishou rose more than 1%, Baidu, Alibaba, etc.; overnight, Nvidia rebounded nearly 7%, and semiconductor stocks picked up today; lithium carbonate futures recovered the 92,000 yuan mark, and lithium stocks strengthened; Tianqi Lithium once rose more than 15%; and most consumer stocks and auto stocks rose. On the other side, Federal Reserve officials are once again putting pressure on precious metals in the short term. Gold stocks weakened throughout the day, while home appliance stocks, sporting goods stocks, and gaming stocks all performed poorly.
1. Semiconductor stocks rebounded today. At the close, Huahong Semiconductor (01347) rose 4.35% to HK$22.8; SMIC (00981) rose 2.91% to HK$17.7; and Shanghai Fudan (01385) rose 2.17% to HK$12.26.
Nvidia rebounded sharply after three consecutive declines, surging about 6.8% overnight, and its total market value returned above $3 trillion. The stock fell more than 6% on Monday, the biggest one-day decline since falling 10% in a single day on April 19. Thierry Wizman, Macquarie's global interest rate and currency strategist, said, “The story of artificial intelligence is still in its infancy and will continue.” Morgan Stanley raised ratings for the chip industry in China and Japan. Its analysts believe that deflation in the technology industry, or price elasticity, combined with the long-term demand in the semiconductor industry brought about by AI, are expected to jointly spawn the next logical semiconductor industry upward cycle.
2. Lithium stocks rallied intraday. At the close, Ganfeng Lithium (01772) rose 6.84% to HK$17.8; Tianqi Lithium (09696) rose 6.38% to HK$25.
On June 26, the main lithium carbonate futures contract surged more than 5%, recovering the 92,000 yuan/ton mark. According to brokerage China quoting foreign media reports, ExxonMobil said that although lithium prices have been low in recent years, demand for lithium will continue to grow, which will help its traditional petroleum business coexist with the production business of key battery materials for electric vehicles. The world's demand for lithium far exceeds current production. At the same time, news of hedging orders being closed is also circulating in the market. According to market rumors, some hedging orders have closed positions, leading to the strengthening of the strength of the bulls.
3. Some consumer stocks strengthened. At the close, Mengniu Dairy (02319) rose 5.02% to HK$14.64; China Tobacco Hong Kong (06055) rose 4.85% to HK$17.3; Budweiser Asia Pacific (01876) rose 4.48% to HK$9.56; and Master Kong Holdings (00322) rose 3.51% to HK$10.04.
Citi released a research report saying that it recently met with about 30 institutional investors during the UK and European marketing schedule. Compared with the US marketing schedule in April, British and European investors are currently more interested in everyday consumer goods than in non-essential consumer goods. Despite remaining cautious about the mainland's macroeconomic environment, investors who have reduced their holdings of Chinese stocks have expressed interest in re-examining their positions in China. The bank revealed that investors continue to be interested in high dividend yield stocks, such as Taobo. The industries and stocks that were asked the most were: beer stocks such as Runbeer, catering stocks such as Mengniu, and Nongfu Spring.
4. Gold stocks are underperforming. At the close, China Gold International (02099) fell 2.98% to HK$50.5; Lingbao Gold (03330) fell 1.99% to HK$2.96; and Zijin Mining (02899) fell 1.32% to HK$16.4.
On the morning of June 25, local time, Federal Reserve officials once again released an “hawk” signal. Federal Reserve Governor Bowman believes that interest rates will not be cut in 2024, and that interest rate cuts will be postponed until 2025. If the decline in inflation comes to a standstill, they are still willing to raise interest rates. Cook, on the other hand, believes that maintaining a stable monthly unemployment rate of employment growth may require 200,000 people. Inflation will continue to decline for 3 and 6 months, and will cool down faster next year. It is appropriate to cut interest rates at some point. Furthermore, the overall strength of the US data released on the same day spurred the US dollar index to rise. Affected by this, precious metal prices were further suppressed, and COMEX gold futures closed down 0.54% to $2331.7 per ounce.
5. The trend of betting stocks is sluggish. At the close, MGM China (02282) fell 3.92% to HK$12.26; Sands China (01928) fell 1.86% to HK$16.9; and Wynn Macau (01128) fell 0.61% to HK$6.55.
According to a research report published by J.P. Morgan Chase, Macau's gaming revenue in the first 23 days of June reached 13.3 billion patacas, while the average daily gaming revenue last week was 514 million patacas, the lowest level in more than six weeks. The bank believes that this is due to seasonal weakness and poor lounge win rates, but gaming revenue in mid-June was still disappointing, meaning that there is a downside risk in the full month's gaming revenue forecast. Furthermore, Citi pointed out that the winning rate in the VIP room remained weak, with betting amounts falling by about 10% month-on-month, while midfield bets dropped by 10-12% month-on-month. The bank conservatively lowered its June gaming revenue forecast from MOP 18 billion to MOP 17.25 billion.
Popular volatile stocks
1. Beijing Finance International (01468) issued a profit warning. At the close, it fell 26.32% to HK$0.112.
Beijing Capital Finance International announced that the Group expects a net loss of no more than HK$700 million for the year ended March 31, 2024, and a net loss of approximately HK$1,163 million for the year ended March 31, 2023. Furthermore, the company recently announced that the sub-license agreement between Forbes Force and Forbes Global Alliance (Hong Kong) will be suspended.
2. Chinese Traditional Chinese Medicine (00570) hit a new low. At the close, it fell 11.72% to HK$3.69.
In February of this year, China Traditional Chinese Medicine announced that Sinopharm Group plans to privatize Chinese medicines at a price of HK$4.6 per share. Compared with the closing price of HK$3.43 before the suspension of trading, the price premium for this privatization is about 34.11%. Based on the relevant shareholding ratio of Sinopharm Group, the total cost of this privatization is approximately HK$15.45 billion.
3. China's Wangwang (00151) strengthened after the results. At the close, it was up 11.11% to HK$4.9.
China Wangwang announced yesterday its annual results for the year ended March 31, 2024. The group obtained revenue of 23.586 billion yuan (RMB, same below), an increase of 2.9% over the previous year; the profit attributable to the company's equity holders was 3.99 billion yuan, an increase of 18.4% over the previous year; it plans to pay a final dividend of 3.3 cents per share, or 2.1 US cents for the same period last year.
4. Junshi Biotech (01877) rose significantly. At the close, it rose 8.3% to HK$12.
An anti-PD-1 monoclonal antibody drug developed independently by Junshi Biotech (trade name: Tuoyi) combined with injectable paclitaxel for the first-line treatment of recurrent or metastatic triple-negative breast cancer with fully verified tests to evaluate PD-L1 positivity was approved by the National Drug Administration (NMPA). This is the tenth indication approved for treprilimab in the Mainland.
5. Television broadcasting (00511) was active throughout the day. At the close, it rose 4.31% to HK$3.39.
The TV broadcast announced that it has reached a new framework cooperation with Tencent Video. This is another comprehensive cooperation in the field of movies and TV dramas after the strategic cooperation agreement signed by the two sides last year. According to reports, the two sides will increase the number of custom-made dramas and double the existing 4 movies to 4.