According to the Wisdom Financial App, the market is awaiting the release of US non-farm payrolls data for June tonight. The Hong Kong stock market opened slightly higher today and then fell back. The Hang Seng Index lost the 18,000 mark again for the whole day. At the close, the Hang Seng Index fell 1.27% or 228.67 points to 17,799.61 points, with a total turnover of 90.321 billion Hong Kong dollars for the day. The Hang Seng China Enterprises Index fell by 1.37% to 6,382.27 points, while the Hang Seng Technology Index fell by 1.45% to 3,596.8 points. For the whole week, the Hang Seng Index rose by 0.46%, the Hang Seng China Enterprises Index rose by 0.8%, and the Hang Seng Technology Index rose by 1.19%.
Guoyuan International pointed out that although there is no long-term support for stability, the current US interest rate hike process has ended, and recent statements by Federal Reserve officials do not indicate any signs that the Fed will return to the interest rate hike track. At the same time, the Central Committee will hold the Third Plenary Session in mid-July. With the approach of the meeting, there may be more favorable policies to further stabilize investor confidence. The bank believes that this round of correction will not last too long, and there is a possibility that the stock index will stabilize when it approaches the appropriate support level.
Blue chip performance
Master Kong Holdings (00322) hit a nine-month high. The stock closed up 1.6% at HKD 10.18, with a turnover of HKD 0.199 billion, contributing 0.52 points to the Hang Seng Index. Recently, netizens in several regions posted messages on social media that Master Kong had raised prices for some instant noodle products starting from July 1. The customer service of Master Kong's classic instant noodle series on the e-commerce platform confirmed that the prices had indeed been adjusted nationwide.
In terms of other blue-chip stocks, Hansoh Pharma (03692) rose 4.13% to HKD 16.64, contributing 1.26 points to the Hang Seng Index. Sino Biopharm (01177) rose 3.66% to HKD 2.83, contributing 1.85 points to the Hang Seng Index. Galaxy Entertainment (00027) fell 3.29% to HKD 35.25, dragging down the Hang Seng Index by 4.21 points. China Construction Bank Corporation (00939) fell 3.25% to HKD 5.36, dragging down the Hang Seng Index by 31.4 points.
Hot sectors
On the market, large technology stocks generally fell; the cryptocurrency market fell across the board, and bitcoin-related stocks continued to fall; the EU imposed temporary tariffs on China today, putting pressure on most automobile stocks; casino stocks, pork stocks, mainland banking stocks, Apple concept stocks, AI concept stocks, mainland real estate stocks and others all fell. On the other hand, pharmaceutical stocks rose in the afternoon, and institutions are confident about the performance of the pharmaceutical sector in the second half of the year; the market is waiting for guidance from the non-farm payrolls data, and gold stocks continued to rise.
1. Pharmaceutical stocks rose in the afternoon. At the close, Kexing Bio-B (06990) rose 7.57% to HKD 163.4; Cana-B (02162) rose 7.29% to HKD 33.85; Tigermed (03347) rose 7.25% to HKD 28.85; Akeso (09926) rose 6.58% to HKD 38.9.
Huaan Securities pointed out that the trend of the pharmaceutical and biological sector has returned to the low point at the end of 2018 and the beginning of 2019, also the bottom point in the past 10 years. Considering valuation digestion, fund positions, growth and other aspects, the bank is confident about the performance of the pharmaceutical sector in the second half of the year. The underlying logic is the growth property of the pharmaceutical industry: (1) the policy-related negative factors have come to an end, and attention should be paid to innovative drugs and consumables; (2) the continuous emergence of blockbuster products in the pharmaceutical industry shows the investment value of pharmaceutical products, and blockbuster products such as GLP1 should be given attention; (3) by the end of 2023, the continuation of health insurance negotiations will bring positive surprises, with incremental contributions expected and (4) funds' positions in pharmaceutical shares have slightly increased, but they are still at a low level; (5) the expectation that the Federal Reserve will not raise interest rates and may even lower them will affect the valuations of pharmaceutical growth stocks.
2. Gold stocks rose again. At the close, Lingbao Gold (03330) rose 4.38% to HKD 3.34; SD Gold (01787) rose 4.32% to HKD 16.92; Zhaojin Mining (01818) rose 4.13% to HKD 14.64; Zijin Mining Group (02899) rose 1.96% to HKD 17.66.
US economic data falling short of expectations boosted the expectation of a rate cut by the Federal Reserve. Spot gold maintained a strong trend, with a price near $2,360 per ounce. The current market is waiting for non-farm payroll data to give more clear guidance. According to a survey by foreign media, non-farm employment may have increased by 0.19 million last month, and the average hourly wage is expected to increase by 3.9% year-on-year, the lowest level in three years. Looking ahead to the second half of the year, industry insiders said that gold prices still have a high probability of rising, supported by factors such as Fed rate cut expectations, increased geopolitical uncertainty, and solid global demand.
Automotive stocks are generally under pressure. At the close, Brilliance China fell 3.53% to HKD 3.83, Xpeng Motors-W fell 3.03% to HKD 30.4, and Great Wall Motor fell 0.84% to HKD 11.8.
After a nine-month anti-subsidy investigation into Chinese electric vehicles, the European Commission has decided to impose provisional anti-subsidy duties on imported electric vehicles from China. The temporary tariff took effect today and will last up to four months, during which EU member states will vote on whether to convert it into a formal tariff for five years. China Great Wall Securities pointed out that after the tariff increase, it may affect the prices of enterprise vehicle models in the short term, and enterprises may need to adjust their local selling prices or compress profit margins. In addition, the United States and the European Union have successively adopted stricter tax policies on Chinese new energy vehicles, which may provoke other countries to follow suit in the future.
The entire Bitcoin concept fell across the board. By the close, OSL Group fell 7.89% to HKD 5.37, Grandshores Technology fell 6.25% to HKD 0.075, OKG Tech fell 3.6% to HKD 0.134, and Meitu fell 1.2% to HKD 2.48.
On July 5th, the cryptocurrency market fell sharply. Among them, Bitcoin once fell below $54,000 per coin, the lowest level since February. Some analysts believe that Bitcoin's continuous decline may be due to the twists and turns of the US election and signs that the tokens seized by the German government have been transferred to exchanges. Global market investors are all betting on the US election, and US President Biden may succumb to pressure from his party and political donors and withdraw from the re-election campaign. In addition, Mt.Gox, a Bitcoin exchange that went bankrupt ten years ago, recently announced that it will start repaying Bitcoin and Bitcoin Cash to investors from early July 2024.
Popular fluctuating stocks
Shares of China Tourism Group Duty Free Corporation (01880) were active throughout the day, rising 3.82% to HKD 54.35 at the close.
Goldman Sachs pointed out that under potential consumption tax reforms, assuming that the consumption tax rate of high-end cosmetics is maintained at 15%, but is collected from consumers through the sales price at the time of purchase, rather than collected from retailers based on the factory price, Chinamex's gross margin advantage will expand from 17 percentage points to 20 percentage points, and China Tourism Group Duty Free Corporation may gain more sales volume or reduce its pricing discount by 3 percentage points.
Since its listing three days ago, Zhong Gan Ling Communications (02545) has halved in stock price, falling 19.12% to HKD 0.55 at the close. It is reported that Zhong Gan Ling Communications focuses on providing telecommunication infrastructure services and digital solution services in China. It is noteworthy that Zhong Gan Ling Communications relies heavily on major customers. In 2023, revenue from its top five customers is expected to account for about 0.592 billion yuan, about 97.2% of its total revenue, and the largest customer is expected to account for about 48.8% of its total revenue.
It is reported that Zhong Gan Ling Communications focuses on providing telecommunication infrastructure services and digital solution services in China. It is noteworthy that Zhong Gan Ling Communications relies heavily on major customers. In 2023, revenue from its top five customers is expected to account for about 0.592 billion yuan, about 97.2% of its total revenue, and the largest customer is expected to account for about 48.8% of its total revenue.