According to the Guotong Finance APP, Hong Kong stocks staged a 'V-shaped' reversal in the afternoon, with the Hang Seng Index temporarily erasing the morning's decline and successfully holding above the 22,000 mark. Earlier, the three major indexes experienced a sudden drop, causing the Hang Seng Index to retreat from its high of over half a year, losing nearly 1000 points; the Hang Seng Index closed down 1.47% or 330.22 points at 22,113.51 points, with a total daily turnover of 310.344 billion Hong Kong dollars; the Hang Seng China Enterprises Index fell 1.58% to 7,914.16 points; the Hang Seng Tech Index fell 3.46% to 4,978.64 points.

Zhang Yidong, Chief Global Strategy Analyst at Guolian Securities, stated that the volatility in Hong Kong stocks is a validation of the reversal logic, rather than just a short-lived rebound. In October, Hong Kong and A-shares are expected to transition from the recent short squeeze rebound to a more sustainable and volatile reversal. In the medium to short term, one should abandon bearish thinking and firmly adopt a bullish mindset. The volatility in October is more about gathering momentum and distinguishing the strong from the weak. The purpose of the volatility is to identify more sustainable and reversal opportunities.

Blue chip performance

Meituan-W (03690) led the blue chips. As of the close, it rose by 3.96% to 205 Hong Kong dollars, with a turnover of 15.515 billion Hong Kong dollars, contributing 75.01 points to the Hang Seng Index. Fuli believes that Meituan has strong execution capabilities, raised its core local business income and operating profit prospects, and recognized the synergistic effects of the company's various business segments. Meituan's fundamentals have improved; Meituan's announcement of data for the first two days of the Mid-Autumn Festival holiday also shows stable performance. The bank gives Meituan a 'buy' rating with a target price of 150 Hong Kong dollars.

In other blue-chip news, China Merchants Bank (03968) rose by 3.78% to 45.35 Hong Kong dollars, contributing 10.51 points to the Hang Seng Index; CNOOC (00883) rose by 2.45% to 20.9 Hong Kong dollars, contributing 12.76 points to the Hang Seng Index; Ali Health (00241) fell by 11.06% to 5.47 Hong Kong dollars, dragging the Hang Seng Index down by 7.2 points; Xinyi Solar (00968) fell by 10.02% to 4.04 Hong Kong dollars, dragging the Hang Seng Index down by 3.6 points.

Hot sectors

On the market, large technology stocks generally drifted lower, with Meituan rising nearly 4% against the market trend, successfully breaking through HK$200 per share. This morning, the Chinese-affiliated brokerage and mainland real estate stocks, which soared yesterday, encountered a big drop, with Shimao Group once plummeting 35% and Orient falling nearly 20% intraday. However, some brokerage stocks surged in the afternoon, with HTSC closing up over 12%; pharmaceutical stocks, auto stocks, consumer stocks, apple suppliers, semiconductor stocks, golden industrial concept stocks, and petroleum stocks all gave back their gains. On the other hand, some low-priced stocks skyrocketed, with Tai United Hold rising by 660%, closing at HK$0.19; Glorious PPT H surged 166.67%, to HK$0.032.

1. Mainland real estate stocks experienced a significant pullback. By the close, Shimao Group (00813) fell by 26.69%, to HK$2.06; Sunac (01918) dropped 21.09%, to HK$3.63; Agile Group (03383) fell by 15.9%, to HK$1.64; and Sino-Ocean GP (03377) declined 14.52%, to HK$0.53.

Influenced by the positive impact of real estate policies, mainland real estate stocks have been on a continuous uptrend recently. Yesterday, many real estate developers hit by scandals experienced explosive gains, staging a doubling in a single day. Among them, Shimao Group surged over 150%, and Agile Group rose by over 160%. However, this morning at the opening, mainland real estate stocks turned sharply downwards, with many stocks dropping by over 30% at one point. Some investors believe that the transmission of policies to the property market requires some time, the recent rise in real estate stocks belongs to the cyclical rebound of the market, the short-term gains are too large, likely to trigger profit-taking, and there may be certain pressure on the subsequent rise.

It is worth mentioning that during the National Day holiday, the real estate markets in many places have shown signs of warming up. Data shows that within 24 hours of the policy announcement, new home transaction volume in Shenzhen increased by 50% year-on-year. According to KE Holdings' data, on the first day of the Golden Week, the average transaction price of second-hand homes in Guangzhou increased by 4.3% compared to the previous day, with transaction volume up by 10% from the previous day. On the evening of October 1st, several developers in Beijing released their sales results, with Poly Beijing achieving 'first-day success, sales of 1.87 billion yuan, hot sales of 9 projects, celebrating the National Day together'; China Merchants Xii having over 100 visits in a single day, subscribing 8 units, 125 million yuan.

2. Some brokerage stocks surged in the afternoon. By the close, Holly Futures (03678) rose by 14.43%, to HK$3.41; HTSC (06886) increased by 12.58%, to HK$17.9; China Merchants (06099) rose by 6.67%, to HK$17.6; and China Galaxy (06881) went up by 3.43%, to HK$9.36.

After the significant surge of Hong Kong brokerage sector stocks yesterday, this morning they encountered a major sell-off, but the sector's losses gradually narrowed in the afternoon, with some Chinese-affiliated brokerage stocks rising. Some analysts believe that with the rapid warming of the capital market, the stock trading volume in A shares and Hong Kong stocks has surged, making the brokerage sector undoubtedly one of the biggest beneficiaries. Previously, in public fund stock investments, holdings of brokerage sector stocks were at historically low levels, with brokerage stocks undervalued. With the improvement in liquidity and the implementation of favorable policies, there is still considerable room for an upward revaluation of brokerage stocks.

China International Capital Corporation believes that brokerage firms currently face three main catalysts: macroeconomic and fiscal monetary policy sentiment (especially focusing on fiscal strength); capital market-related reform catalysts (such as the stabilization fund policy, detailed implementation of convenient rules for mutual access between securities fund insurance companies and the central bank); and industry consolidation events.

3. Auto stocks saw a general sharp decline. By the close, Xpeng (09868) fell by 8.36%, to HK$50.4; Li Auto Inc (02015) dropped by 5.76%, to HK$114.5; and Great Wall Motor (02333) declined by 2.9%, to HK$15.38.

According to Tesla, in the third quarter of 2024, Tesla globally produced approximately 0.47 million electric vehicles, delivering about 0.463 million electric vehicles. Tesla's third-quarter delivery volume was lower than expected due to incentive measures and low-cost financing failing to drive demand for its older models in the competitive market. Tesla's stock price plummeted by over 6% overnight. It is worth mentioning that domestic new energy vehicle companies have successively released their new car delivery data for September, with many companies achieving record-high delivery volumes.

4. Golden industrial concept stocks collectively declined. At the close, Lingbao Gold (03330) fell by 5.18% to HK$2.93; Zijin Mining Group (02899) dropped by 3.49% to HK$35.95; Zijin Mining Group (02899) fell by 2.07% to HK$18.02; Shandong Gold Mining Co., Ltd. (01787) declined by 1.98% to HK$17.78.

In September, the U.S. private sector added 0.143 million jobs, higher than the expected 0.12 million, leading to a cooling of market expectations for a substantial Fed interest rate cut, causing the U.S. dollar to strengthen, U.S. bond yields to rebound, and the international gold price to fall under pressure on Wednesday, with COMEX gold futures closing down by 0.17% at $2680.2 per ounce. However, Goldman Sachs raised its early 2025 gold price forecast from $2700 per ounce to $2900, citing increasing exchange-traded fund (ETF) inflows with Western and Chinese rate cuts, as well as rising central bank purchases.

Popular fluctuating stocks

1. Lingbao Gold hit another high. At the close, it rose by 8.53% to HK$171.8.

Lingbao Gold recently announced a price increase, with an overall increase ranging from 4% to 11%. It is reported that this is Lingbao Gold's second price increase this year, mainly in response to the rising international gold prices. Caitong Securities stated that the company is a pioneer in China's traditional gold industry, focusing on the traditional gold track, leveraging high-end products, channel positioning, and differentiation to enhance brand potential, with single-store efficiency and continuous expansion boosting growth.

2. China Shengmu Pharm-B (01672) rose against the market. It rose by 5.38% to HK$1.37 at the close.

China Shengmu Pharmaceutical announced that its wholly-owned subsidiary Ganli, dedicated to the research, development, and commercialization of new drugs in the field of metabolic disorders related to non-alcoholic steatohepatitis (NASH), announced that its strategic partner Sagimet's ASC40 (Elafibranor) for the treatment of fibrosis confirmed 2/3 stage NASH patients through liver biopsy has received breakthrough therapy designation from the U.S. FDA. China Shengmu has obtained exclusive authorization for ASC40 in the Greater China region from Sagimet.

Shenzhou International (02313) performance is weak. As of the close, it fell by 4.46%, at 69.7 Hong Kong dollars.

Nike's latest financial report shows that its first-quarter revenue was 11.59 billion US dollars, a 10% year-on-year decrease, estimated to be 11.65 billion US dollars. In addition, Nike postponed the investor meeting scheduled for November and withdrew its full-year performance guidance. Nike's CFO said that second-quarter revenue is expected to decline by 8% to 10%. It is understood that Nike is Shenzhou International's largest customer, accounting for 31.1%.