Oct 9th, Caifex News (Editor: Feng Yi) Today, the Hong Kong stock market experienced increased volatility, rising in the morning session before turning downward, then briefly rising to enter the red again, followed by afternoon oscillations downward.

As of the close, the Hang Seng Index and the Hang Seng China Enterprises Index fell by 1.38% and 1.58% respectively, the Hang Seng Tech Index dropped by 1.17%, all three indexes are on a two-day decline.

Let's look at today's market highlights: The overall market lacks a leading theme, with trading halting and volatility increasing; under the coordinated decline of the Hong Kong stock markets, market focus shifts to fiscal stimulus; brokerages and real estate stocks see deep corrections, bullish rebounds are on the way.

【Lack of leading theme in the overall market, trading halts with increased volatility】

On the market front, key technology and brokerage stocks show weakness, with the overall market lacking a leading theme and appearing relatively weak.

Regarding technology stocks, apart from Meituan's rise of over 2%, Baidu, Tencent, Alibaba, and Xiaomi all dropped by around 1%; brokerage stocks continue to adjust, Guolian Securities, Shenwan Hongyuan with nearly 20% decline each, CICC, China Merchants Securities both plunging over 10%.

In other hot topics, real estate stocks notably declined, sectors such as pharmaceuticals, infrastructure, shipping, photovoltaics, and home appliances all fell together; the commodities sector including oil and gold also saw prominent declines.

Among the rising sectors, dining stocks have shown a counter-trend widespread increase, with consumer electronics and semiconductor stocks relatively active.

Overall, after the short-term momentum of the Hang Seng Index subsided, the emotional aspect needs to be reorganized. The increased market volatility today also demonstrates a divergence of opinions.

Today, the Hang Seng Index traded 427.014 billion Hong Kong dollars, with a total short-selling amount of 35.775 billion Hong Kong dollars, short-selling funds accounting for 8.38%, slightly lower than the average of the past 5 days.

Alibaba-W, Meituan-W, and Semiconductor Manufacturing International Corporation ranked top three in short-selling amounts, at 2.536 billion Hong Kong dollars, 1.711 billion Hong Kong dollars, and 1.55 billion Hong Kong dollars respectively.

Under the linkage decline of the Hong Kong A shares, the market focus is shifting towards the fiscal end.

In terms of market performance, today's Hong Kong stocks clearly followed the A shares in tandem, with intraday trends converging.

Today, more than 3000 A-shares fell by over 9% throughout the day, with the trading volume still approaching nearly 3 trillion yuan. The Hang Seng Index also saw total trading volume exceeding a trillion Hong Kong dollars over the past two trading days.

The short-term consecutive significant declines in both markets have trapped many chasing funds that bought high. Concerns within the market are beginning to affect bullish confidence, which is worth careful attention.

However, china securities co.,ltd. strategy team pointed out that the market's technical pullback is in line with expectations, there is no need to panic, and it is noted that the current market has consumed a lot of adjustment pressure.

Data shows that the maximum retracement of Wind A-shares in the past two days is about 11.5%, which is relatively rare historically and already considered a significant adjustment. It exceeds the approximately 8.4% retracement since July 14, 2020, and the maximum retracement in two months from April to June 2019 was less than 17%.

It is worth noting that china securities co.,ltd. also emphasized that the short-term fiscal policy is a focus of market attention. They believe that according to the current policy objectives, monetary and fiscal policies will definitely work together. With the recent major moves by the central bank, fiscal policy will not be ineffective and will certainly provide some support.

The latest information shows that the State Council Information Office will hold a press conference at 10:00 am on Saturday, October 12, 2024, where Minister of Finance Lan Fu'an will introduce the relevant information on "increasing the counter-cyclical adjustment of fiscal policy and promoting high-quality economic development" and answer questions from reporters.

Overall, after the holiday, both the Hong Kong and A-share markets have experienced adjustments following the rapid rise in the previous period. With market expectations being met, the policy outlook is in a vacuum period. The upcoming press conference during the weekend may become an important turning point affecting the market direction.

[Brokerage and real estate stocks are experiencing a deep retracement, and positive rebound is on the way.]

On the other hand, this evening, gtja and haitong sec both disclosed major asset restructuring plans, and will resume trading tomorrow.

Due to the suspension period, these two top brokerages have almost missed the entire uptrend. Whether they can make up for the rise and lead to a rebound in the market after resuming trading tomorrow is also one of the focal points.

In addition, as mainland real estate stocks, which serve as the initial driving force for the market, have been adjusting continuously in recent days, the overall level has fallen back to that of September 27th. However, Morgan Stanley stated in its latest report that real estate sales performance during the Golden Week has exceeded expectations.

According to Morgan Stanley, major developers it tracks showed strong sales performance during the National Day Golden Week in 2024, with an average year-on-year growth of 39%. This represents 86% of the September sales and 60% of the October 2023 contract sales, indicating that October sales are likely to see a mid-double-digit growth on a month-on-month basis, with a significantly reduced year-on-year decline. Some state-owned developers may achieve positive year-on-year growth.

Combining the short-term deep pullback of real estate stocks with favorable data on the ground, a rebound trend may also be imminent.