① Hang Seng Index short-term sentiment turns weak with a neutral stance, should short-term bears add positions? ② After the pullback, foreign investors still bullish on Chinese stocks, how to view the future market?
Caixin on October 14 (Editor Feng Yi), today's Hong Kong stock market remains volatile. As of the close, the Hang Seng Index fell by 0.75% to just above 21,000 points, the Hang Seng China Enterprises Index fell by 0.54%, and the Hang Seng Tech Index fell by 1.43%.
Let's look at today's market highlights: shrinking market sentiment turning weak, Hang Seng Index in a short-term neutral stance; incremental policies leading the market hotspots, geopolitical risks boosting cyclical sector; two major macroeconomic data releases, after pullback, foreign investors still bullish on Chinese stocks.
[Shrinking market sentiment turns weak, Hang Seng Index in a short-term neutral stance]
On the market, today's core technology stocks generally fell, Meituan down over 5%, Baidu down nearly 3%, Alibaba, Tencent, Xiaomi all with declines.
In other hot topics, golden industrial concept stocks show strong rebound momentum, china mainland banking benefiting from incremental policies collectively rose. In addition, real estate, electrical utilities, oil & gas, shipping, and other cyclical sectors lead in gains.
Among the declining sectors, brokerage stocks significantly declined, the CSI Consumer 360 Index all fell in the consumer sector, with sporting goods, dining, autos, and other industries falling across the board.
Overall view, Hong Kong stocks in the short-term remain neutral with market sentiment noticeably turning weaker compared to last week.
Today, the Hang Seng Index traded a total of 277.073 billion Hong Kong dollars throughout the day, showing a staggered decline over the past four trading days, with a significant drop from the peak of 620.438 billion Hong Kong dollars on October 8th. The total short-selling amount is 25.807 billion Hong Kong dollars, accounting for 9.31% of the short-selling funds, close to the five-day average level.
Alibaba-W, Semiconductor Manufacturing International Corporation, and Meituan-W ranked top three in short-selling amount, with 1.231 billion Hong Kong dollars, 0.968 billion Hong Kong dollars, and 0.932 billion Hong Kong dollars respectively.
Incremental policy-driven hotspots lead the market, while geopolitical risks drive up cyclical sector plate.
In terms of the market, macro incremental policies continue to be the dominant force in short-term market trends, with today's market focus also centered on the interpretation of the policies related to the press conference of the Ministry of Finance on October 12th.
At the press conference, Finance Minister Liao Fa'an stated that the government will use additional tools such as local government special bonds, special funds, tax policies, etc., to support stabilizing the real estate market, actively research and introduce policies conducive to the stable development of the real estate sector; to issue special national bonds to support large state-owned commercial banks in supplementing core tier-one capital, enhancing banks' risk resistance and credit extension capabilities.
Driven by the above news, today banks and real estate stocks are significantly stronger than the overall market. Some analysts believe that the recent substantial incremental policies of the central bank have also seized key points in the real estate and capital markets.
In addition, with the recent escalation of the Middle East situation, the trends of related sectors such as gold, shipping, and oil have also begun to detach from the overall market and independently strengthen.
Firstly, the international gold price is approaching the $2700 mark, followed by many shipping giants including Maersk announcing a new round of freight rate adjustment plans. International rating agency Fitch Ratings also stated that the geopolitical risk premium partially offset the market's weakness on oil prices.
After the callback, foreign investors remain bullish on Chinese stocks as two key macroeconomic data are released.
On the other hand, today two important macroeconomic data were released, exerting pressure on the consumer and export sectors.
According to statistics from the General Administration of Customs, China's exports increased by 1.6% in September, with the growth rate slowing down. After trading hours, the central bank announced financial data for September, with broad money M2 balance at 309.48 trillion yuan, a year-on-year increase of 6.8%, and narrow money M1 balance at 62.82 trillion yuan, a year-on-year decrease of 7.4%.
Overall, as the increment policy bullish effects mainly started to be implemented at the end of September, the impact on the data may need to be delayed until the October data release to see results.
However, despite the significant pullback in the Hong Kong A-share market since last week's peak, many foreign institutions have expressed the view of continuing to "buy the dips".
Bank of America strategists suggest buying Chinese stocks on dips in their latest report. The Bank of America team states that with the upward revision of economic growth forecasts and the rise in bond yields, they expect an increase in asset allocation to China. UBS Securities China stock strategy analyst Meng Lei also believes that the current market upward momentum driven by loose policies is still present in the short term.
Analysts in the industry suggest that currently various incremental funds such as resident wealth, bank wealth management, and foreign capital are gathering, with still a large potential market size. As the market enters a "swing" state, after short-term fluctuations, it is highly likely to return to fundamental-driven logic, potentially bringing a longer-lasting uptrend.
