On the 19th, the Hong Kong market saw the Hang Seng Index, comprised of 83 major stocks, decline by 112.04 points (0.56%) to 19,752.51 points, and the China Mainland Stock Index (formerly the H-shares Index), made up of mainland company stocks, drop by 28.66 points (0.40%) to 7,152.13 points. The trading volume expanded to 142.8 billion 69.6 million Hong Kong dollars (on the 18th it was 107.5 billion 41.1 million Hong Kong dollars).
Investor caution is on the rise. Following the results of the U.S. Federal Open Market Committee (FOMC), there is a dislike for the significant rise in U.S. long-term interest rates. The FOMC, which concluded last night (Japan time), decided on a 0.25% rate cut as expected, but revised the forecast for the number of rate cuts in 2025 from the previous four to two. In response, the U.S. bond market saw a sharp rise in the yield of the 10-year treasury, reaching levels not seen since May 30 of this year. Even though the regional policy interest rates in Hong Kong have been lowered in line with U.S. monetary policy, the outlook for interest rates next year remains uncertain.
However, there are no noticeable selling pressures driving prices down. As China's economic Statistics for November are expected to be weak, market expectations suggest that authorities will strengthen support for the economy. Economists have also indicated that the Chinese government is likely to introduce monetary easing measures soon. The Index has reduced its decline as the trading day closed. (Asia Research Editorial Department)
Among the ConstituentStocks in Hang Seng Index, Baidu (9888/HK), China's largest internet search company, was notably down 4.2%. This decline is attributed to the halt in the adoption of its AI (Artificial Intelligence) "iPhone." According to foreign reports on the 19th based on insider information, Apple (AAPL/NASDAQ) is reportedly in discussions to equip the Smart Phone "iPhone" sold in China with AI models from TENCENT (700/HK) and Peking ByteDance Technology (ByteDance), while TENCENT's stock rose by 2.3%. Previously, it was reported that Baidu and Apple were in talks regarding the use of AI.
By Sector, the real estate markets in Hong Kong and on the mainland are performing poorly. Henderson Land Development (12/HK) dropped by 3.3%, Link Real Estate Investment Trust (823/HK) and Hang Lung Properties (101/HK) both fell by 2.4%, China Vanke (2202/HK) decreased by 4.7%, and SUNAC (1918/HK) and Guangzhou R&F Properties (2777/HK) each dropped by 2.4% and 2.0%, respectively. Concerns over management issues have also resurfaced for China Vanke. It was reported that Chinese authorities requested major Insurance companies to report their credit exposures related to Vanke.
The Marine Shipping sector also struggled. PACIFIC BASIN (2343/HK) fell by 2.4%, COSCO SHIP HOLD (1919/HK) decreased by 2.2%, SITC (1308/HK) dropped by 1.5%, and OOIL (316/HK) ended down 1.4%.
On the other hand, components related to Smart Phones showed gains. Hill Tai Technology (1478/HK) rose by 4.6%, Sunny Optical Technology (2382/HK) increased by 4.4%, COWELL (1415/HK) was up by 2.8%, and AAC TECH (2018/HK) climbed by 2.0%.
Meanwhile, the mainland market also fell. The Shanghai Composite Index closed down 0.36% at 3,370.03 points. Consumer sectors were low. Real estate, resources/materials, utilities, finance, and Marine Shipping were also sold. However, high-tech sectors performed well. Communications and some airline stocks were also bought.
Asia Research Co., Ltd.
