Intelligent Finance Reuters APP learned that Hong Kong stocks opened under pressure this morning, but then fluctuated and strengthened, and the three major indexes successively turned red. Among them, the Hang Seng Tech Index performed the strongest, with a rise of 1.42% in intraday trading. As of the close, the Hang Seng Index rose 0.09% or 17.03 points to 18,089.93 points, with a total daily turnover of HKD 95.15 billion; the Hang Seng China Enterprises Index rose 0.2% to 6,477.24 points; the Hang Seng Tech Index rose 0.94% to 3,689.68 points.
Guotai Junan pointed out that with the reduction of uncertainty in China's economy and policy field, the sentiment of Hong Kong's stock market has improved. Overseas, major central banks successively lowered interest rates for the first time. Although the Fed stated at its June interest rate meeting that it tended to be hawkish, its intention to protect the financial and labor markets was obvious. Some economic data showed signs of weakness, and the downward trend of overseas interest rates is a trend. The decline in uncertainty is particularly evident in Hong Kong stocks and will be a key driver of Hong Kong stock gains.
Blue chip performance
Netease-S (09999) leads blue chips. As of the close, it rose 6.21% to HKD 150.6, with a turnover of HKD 1.579 billion and contributed 9.76 points to the Hang Seng Index. According to Fuli research report, Netease's "Endless Hegemony" mobile game will be open beta on July 25. Considering that players are familiar with the PC version of the game, and insiders' expectations are higher than the market, the first-month revenue is expected to reach about RMB 1 billion. The bank maintains a "buy" rating on Netease with a target price of HKD 202.
As for other blue-chip stocks, Mengniu Dairy (02319) increased by 5.02% to HKD 14.64, contributing 3.54 points to the Hang Seng Index; Sino Biopharm (01177) increased by 4.55% to HKD 2.76, contributing 2.22 points to the Hang Seng Index; Shenzhou International (02313) fell 2.48% to HKD 78.55, dragging the Hang Seng Index down 2.65 points; Sinopharm (01099) fell 2.34% to HKD 20.9, dragging the Hang Seng Index down 1.1 points.
Hot sectors
On the market, most large tech stocks rose, with Kuaishou up more than 1%, and Baidu and Alibaba both posting gains; Nvidia rebounded nearly 7% overnight, and semiconductor stocks rebounded today; carbonate lithium futures regained the RMB 92,000/ton mark, lithium stocks rose and strengthened, and Tianqi Lithium once rose more than 15%; most consumer stocks and auto stocks rose. On the other side, Fed officials put on the hawkish attire again, and precious metals were under short-term pressure. The golden industrial concept was weak all day, and home appliance stocks, sporting goods stocks, and Macau casino stocks all performed weakly.
1. Semiconductor stocks rebounded today. As of the close, Hua Hong Semiconductor (01347) rose 4.35% to HKD 22.8; SMIC (00981) rose 2.91% to HKD 17.7; and Shanghai Fudan (01385) rose 2.17% to HKD 12.26.
Nvidia rebounded sharply after three consecutive declines, rising nearly 6.8% overnight, and its total market value returned to above US$3 trillion. The stock fell more than 6% on Monday, the biggest single-day decline since April 19th. Thierry Wizman, global rates and currency strategist at Macquarie, said,"The artificial intelligence story is still in its infancy and will continue." Morgan Stanley raised its ratings on China's and Japan's chip industries. Its analysts believe that deflation in the technology industry, i.e., price elasticity, coupled with the long-term demand for semiconductors brought by AI, is expected to jointly drive the next logical cycle of the semiconductor industry.
2. Lithium stocks rose sharply in intraday trading. As of the close, Ganfeng Lithium (01772) rose 6.84% to HKD 17.8; Tianqi Lithium (09696) rose 6.38% to HKD 25.
On June 26, the main contract of carbonate lithium futures rose more than 5% and regained the RMB 92,000/ton mark. According to reports cited by Chinese securities firms, ExxonMobil said that although lithium prices have been depressed in recent years, demand for lithium will continue to grow, which will help its traditional oil business coexist with the production of key battery materials for electric vehicles. The world's demand for lithium far exceeds the current production. At the same time, there were also rumors in the market of some hedge fund closing their positions, which led to the strengthening of longs.
3. Some consumer stocks performed well. At the close, Mengniu Dairy (02319) rose 5.02%, closing at HKD 14.64; China Tobacco Hong Kong (06055) rose 4.85%, closing at HKD 17.3; Bud APAC (01876) rose 4.48%, closing at HKD 9.56; Tingyi (00322) rose 3.51%, closing at HKD 10.04.
According to Citigroup's research report, during recent promotional trips to the UK and European markets, around 30 institutional investors were met, and compared with the promotional trips to the US market in April, investors in the UK and Europe are currently more interested in daily consumer goods than non-essential consumer goods. Although they still hold a cautious attitude towards the macro environment in mainland China, investors who have reduced their holdings of Chinese stocks have expressed interest in re-examining their positions in China. The bank revealed that investors continue to be interested in high dividend stocks, such as Topsports. The most frequently asked about industries and stocks are beer stocks such as Run beer, dining stocks such as Mengniu and Nongfu Spring, among others.
4. The performance of golden industrial concept stocks was weak. At the close, Chinagoldintl (02099) fell 2.98%, closing at HKD 50.5; Lingbao Gold (03330) fell 1.99%, closing at HKD 2.96; Zijin Mining Group (02899) fell 1.32%, closing at HKD 16.4.
On the morning of June 25th local time, Federal Reserve officials once again sent out hawkish signals. Federal Reserve Board member Bowman believes that interest rates will not be cut in 2024 and that the rate cut will be postponed to 2025. If the progress of the return of inflation slows, they are still willing to raise interest rates. Cook believes that keeping employment growth stable to maintain monthly unemployment rates may require 200,000 people. The three-month and six-month inflation rates will continue to decline, and they will cool down faster next year. It is appropriate to cut interest rates at some point. In addition, overall solid US data was announced on that day, stimulating the rise of the US dollar index. Influenced by this, the prices of precious metals were further suppressed, and COMEX gold futures fell 0.54% to close at USD 2,331.7 per ounce.
5. The performance of Macau casino stocks was weak. At the close, MGM China (02282) fell 3.92%, closing at HKD 12.26; Sands China (01928) fell 1.86%, closing at HKD 16.9; Wynn Macau (01128) fell 0.61%, closing at HKD 6.55.
JPMorgan released a research report stating that Macau's casino revenue reached MOP 13.3 billion in the first 23 days of June, while the daily average casino revenue last week was MOP 514 million, the lowest in over six weeks. The bank believes that this is due to seasonal weakness and poor win rates in VIP rooms, but the casino revenue in mid-June is still disappointing, indicating downside risk for the entire month. In addition, Citigroup pointed out that the win rate in VIP rooms remains weak, while betting amounts decrease by about 10% month-on-month, and the betting amounts in the mass-market segment decrease by 10-12% month-on-month. The bank conservatively lowered its forecast for June casino revenue from MOP 18 billion to MOP 17.25 billion.
Popular fluctuating stocks
1. Kingkey Financial International Holdings (01468) released a profit warning, falling 26.32% to close at HKD 0.112 at the close.
Kingkey Financial International Holdings announced that it is expected to record a net loss of no more than approximately HKD 700 million for the year ending March 31, 2024, while it recorded a net loss of approximately HKD 1.163 billion for the year ending March 31, 2023. In addition, the company recently announced that the transfer of franchises from Energetic Force to Forbes Global Alliance (Hong Kong) will be terminated.
2. Trad Chi Med (00570) hits a new low in the stage, closing down 11.72% at HKD 3.69.
In February of this year, Trad Chi Med announced that China National Pharmaceutical Group intends to privatize Trad Chi Med at a price of HKD 4.6 per share, an approximately 34.11% premium over the pre-suspension closing price of HKD 3.43. According to the relevant shareholding ratio of China National Pharmaceutical Group, the total cost of this privatization is approximately HKD 15.45 billion.
3. Want Want China (00151) performed well after the earnings announcement. At the close, it rose 11.11% to close at HKD 4.9.
According to the fiscal year-end performance of Want Want China released yesterday, the group achieved revenue of CNY 23.586 billion, a year-on-year increase of 2.9%; the profit attributable to equity shareholders of the company was CNY 3.99 billion, a year-on-year increase of 18.4%; and proposed to distribute a final dividend of USD 0.033 per share, compared to USD 0.021 in the same period last year.
4. Junshi Bio (01877) rose significantly, up 8.3% to close at HKD 12.
Junshi Bio's self-developed anti-PD-1 monoclonal antibody drug Tuoyi single (trade name: Tuo Yi) combined with paclitaxel injection for the first-line treatment of PD-L1 positive recurrent or metastatic triple-negative breast cancer was approved as a new indication by the National Medical Products Administration (NMPA). This is the tenth indication approved by Tuoyi single in mainland China.
TVB(00511) was active throughout the day, closing up 4.31% at HKD 3.39.
TVB announced a new framework cooperation with Tencent Video in the field of film and television dramas, following the comprehensive cooperation agreement signed between the two parties last year. It is reported that the two sides will increase the number of custom drama cooperation, doubling it from 4 to 8.