"Science and Technology Board Daily" news on October 9 (special reporter Chen Junqing), after the hot rise of Hong Kong stocks reflected in the popular Chinese concept stocks during the National Day holiday, a substantial decline occurred on October 8. The Hang Seng Index fell by 9.41%, the Hang Seng Tech Index plummeted by 12.82%, and Bilibili dropped as much as 19.7%, leading the decline among constituent stocks. In terms of heavyweight stocks, Tencent Holdings fell by 8.3%, Alibaba by 8.8%, and Meituan by 15.6%.

With a series of economic and policy measures issued before the holiday, Chinese assets have become the focus of global funds. Hong Kong stocks continued to rise during the National Day holiday. From September 11 to October 7, over 17 trading days, the Hang Seng Index has accumulated a rise of 34.03%, while the Hang Seng Tech Index has soared by 56.10%. On Monday, the Hang Seng Index, Hang Seng Tech Index, and Hang Seng China Enterprises Index continued to hit a two-and-a-half-year high.

The continuous rise has allowed for the valuation of the Hong Kong stock market to be restored. As of October 7, data shows that the Hang Seng Tech Index's P/E ratio is 29.53, at the 46.19th percentile, exceeding the 80th percentile value of 42.26 in the last three years. Following a significant drop yesterday, the current percentile has fallen to 41.01%, indicating that it is not in a significantly undervalued range.

A brokerage analyst shared his views with the "Science and Technology Board Daily" reporter, stating that he believes the drop in the Hong Kong stock market yesterday is mainly due to the opening of the A-share market, the shift in the main battlefield, and the implementation of the National Development and Reform Commission's meeting. The market is waiting for further policy signals.

Alan Yan, an analyst at Zhongtai International, mentioned that the investment strategy now includes the addition of "capitalizing on profits at the right time." Due to the extremely high gradient violent rise of Hong Kong stocks, which is difficult to sustain for a long time, the short-term valuation adjustment has been sufficient. As the market awaits verification of economic data and policy implementation, there may be a sharp increase in market volatility. Profit-taking pressure at high levels cannot be ruled out, hence the advice to pay attention to the trading pace and capitalize on profits at the right time.

In terms of funds, looking at market turnover, the Hang Seng Index's trading volume on October 8 reached a record high of 620.4 billion Hong Kong dollars. Additionally, multiple institutions have pointed out that foreign capital has shown a greater interest in allocating to Chinese assets, with overseas active funds switching to net inflows for the first time in 65 weeks since the end of June 2023. Subsequent trends are worth monitoring.

Regarding the influx of funds into Hong Kong stocks, the CICC research report points out that the market is clearly overbought and overleveraged.technical indicatorsLook, the relative strength index (14 days) measuring the overbought level reached 90.9 on October 2, hitting a new high.RSIIn addition, the Hang Seng Tech Index (14-day RSI) also hit a new high of 93.5 on October 2.

For the future trend, Everbright International Strategy Analysts stated to Caijing that based on the cumulative increase in Hong Kong stocks over the past few weeks, the current decline in the Hang Seng Index is relatively reasonable.

Yesterday, there was a large trading volume in Hong Kong stocks, reflecting an active speculation activity among investors with the opening of A-shares. Looking at the medium to long term, with investors' continued anticipation of policy benefits, the future stock index still has certain room for performance.

Furthermore, the above-mentioned researchers told reporters that the short-term market has benefited from the pulse-like rapid reversal that may be coming to an end, and the second stage is expected to transition to a market characterized by better performance in the first half of 2024 driven by genuine fundamental marginal changes.