On March 12, the Hang Seng Technology Index rebounded more than 20% from its low point during the year. According to the standard of generally rebounding more than 20% from a low point into a technical bull market, the Hang Seng Technology Index has entered a technical bull market. At the same time, the Hang Seng Index's earnings also changed from negative to positive for the first time during the year.
Why have Hong Kong stocks rebounded strongly recently?
According to market analysis, this round of rebound in Hong Kong stocks was driven by a number of factors, such as increased market confidence, the return of foreign capital, and continuous purchases of mainland capital supported by policies and measures.
Since the central government introduced a number of measures to stabilize market confidence at the beginning of the year, along with improvements in the Chinese economy and corporate profits and the return of foreign capital, investors have begun to pay for the rebound in the Hong Kong stock market. Furthermore, overseas investors are beginning to adapt to the restructuring of the Chinese economy and are gradually optimistic about the new round of policies to promote high-tech growth and economic development.
From a domestic perspective, continuous net purchases of Hong Kong stocks have continued for quite some time. Since February 7, Southbound Capital has continued to make net purchases of Hong Kong stocks for 19 trading days, with a continuous net purchase amount of HK$56.4 billion.
Furthermore, the strengthening of technology stocks is related to recent overseas market expectations that the Federal Reserve is expected to cut interest rates within the year. Guoxin Securities pointed out that this move will help the market risk appetite to further increase. Driven by technological innovation such as AI, the NASDAQ and North American technology stocks have performed strongly recently, and the index has continued to hit new highs since 2023. The brokerage firm also stated,
In terms of domestic economic policy, the real estate policy has continued to be loosened recently, the monetary interest rate policy has been further relaxed, and the central bank has drastically cut 50 bp to release liquidity. The country as a whole is still in the stage of economic recovery. Policy support continues to be introduced, and it is expected that demand will continue to be supported.
Which companies are helping?
According to Futu News, among the constituent stocks of the Hang Seng Technology Index,$MEITUAN-W (03690.HK)$,$BILIBILI-W (09626.HK)$It has rebounded more than 50% since its low during the year; in auto stocks$LI AUTO-W (02015.HK)$,$XPENG-W (09868.HK)$They rose by more than 43% and 35% respectively; in addition, travel stocks also performed well.$TONGCHENGTRAVEL (00780.HK)$,$TRIP.COM-S (09961.HK)$The increase was over 40% and 30%, respectively.
Foreign-funded institutions are gradually getting louder
According to Morgan Stanley's analysis, long-term global investors have completely changed their previous attitude towards Chinese stocks, and some funds have begun to be more positive about the prospects of the Chinese market.
Temple, chief market strategist at Lazard Asset Management, recently pointed out that based on analysis and forward-looking judgment on the Chinese market, increasing investment in the Chinese market may be a wise decision now. He predicted that within the next 12 to 18 months, the Chinese stock market could become one of the best performing markets in the world.
Bank of America Merrill Lynch's Winnie Wu strategist team announced earlier this week that US investment institutions expect the Chinese economy to receive more policy support, but are curious about how they can achieve growth targets without more specific stimulus measures. Some investors are more concerned about adjustments in the real estate market, price trends, and their impact on corporate profits.
Cow friends,
What do you think of this technical bull market?
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Editor/Somer