According to the Securities Times APP, the State Council Information Office will hold a press conference on Saturday afternoon to introduce the relevant situation of "increasing the intensity of fiscal policy countercyclical adjustment and promoting high-quality economic development". The three major Hong Kong stock indexes rose in the afternoon after falling by more than 3% in early trading, but then fell again at the end of the session. At the close, the Hang Seng Index fell by 1.38% or 289.55 points to 20637.24 points, with a total daily turnover of 427.014 billion Hong Kong dollars; the Hang Seng China Enterprises Index fell by 1.58% to 7365.59 points; the Hang Seng Tech Index fell by 1.17% to 4640.75 points.

Bocom International believes that in the extreme rapid rise of the market in the short term, the violent fluctuations are a normal technical adjustment of the market, but under policy support, the overall upward trend of Hong Kong stocks remains unchanged. It is expected that with the combined push of the macro environment at home and abroad, Hong Kong stocks are still worth looking forward to in October. The bank pointed out that it is expected that during the future upward trend of Hong Kong stocks, the differentiation in fundamentals will also lead to price differentiation, with high volatility and high differentiation possibly becoming the main characteristics of the operation of Hong Kong stocks in the near future.

Blue chip performance

Meituan-W (03690) rose against the trend. At the close, it rose by 2.33% to 184.4 Hong Kong dollars, with a turnover of 20.178 billion Hong Kong dollars, contributing 40.37 points to the Hang Seng Index. It is reported that Meituan is further expanding into the Middle East market, with its overseas version app Keeta officially launched in Riyadh, the capital of Saudi Arabia. Starting from 11 am Saudi time this morning, users in Riyadh will enjoy a 50% discount and free delivery on their first orders.

Regarding other blue-chip stocks, CKI Holdings (01038) rose by 2.53% to 52.7 Hong Kong dollars, contributing 1.32 points to the Hang Seng Index; Power Assets (00006) rose by 1.95% to 49.65 Hong Kong dollars, contributing 2.16 points to the Hang Seng Index; Ali Health (00241) fell by 7.08% to 4.33 Hong Kong dollars, dragging down the Hang Seng Index by 3.41 points; HKEX (00388) fell by 5.52% to 322 Hong Kong dollars, dragging down the Hang Seng Index by 37.05 points.

Hot sectors

On the market, large technology stocks are generally trading lower, with Alibaba down 1.53% and Tencent down 1%. China-affiliated brokerage stocks and mainland real estate stocks opened high and traded low today, with Guolian Securities falling over 18% and Zhongliang Holdings dropping 20%; semiconductor stocks and the mobile industry chain also surged and fell back; the spot market continued to decline, shipping stocks continued to fall; tensions in the Middle East may ease, with overnight oil prices plunging over 4%, causing petroleum stocks to plummet again; construction machinery stocks, cement stocks, infrastructure stocks, photovoltaic stocks, pharmaceutical stocks, nonferrous metals stocks, etc., all declined.

1. China-affiliated brokerage stocks led the decline. As of the close, Guolian Securities (01456) fell by 18.23% to HK$4.44; Everbright Securities (06178) fell by 13.85% to HK$7.96; HTSC (06886) fell by 13.42% to HK$13.16; China Merchants Securities (06099) fell by 11.06% to HK$14.64.

UBS Group's research report points out that it believes the securities industry is experiencing multiple catalytic factors, including macro aspects such as mainland reserve ratio cuts, interest rate cuts, and reductions in existing home loan rates; in the capital markets aspect, the establishment of market value management guidelines, support for share repurchases, and attracting long-term funds into the stock market. The bank points out that the sustainability of the securities industry's upward trend depends on multiple catalytic factors, including the adequacy of liquidity, macro policy support, signs of economic improvement, and favorable policies. As this rebound started from a lower base, it may imply a higher magnitude of this rebound. The bank believes that the A-share valuation of brokerage stocks is still relatively cheap, but compared to historical average valuations, the H-share valuation is not considered cheap.

2. Shipping stocks continue to decline. As of the close, COSCO Ship Energy (01138) fell by 9.46% to HK$8.71; COSCO Shipping Holdings (01919) fell by 7.8% to HK$11.34; Pacific Basin (02343) fell by 4.66% to HK$2.25; OOIL (00316) fell by 4.14% to HK$102.

Main Euro Line futures contracts, after plunging nearly 20% yesterday, continued to decline today, falling by over 10% at one point during trading. According to the latest data from the Shanghai Shipping Exchange, as of October 7, 2024, the Shanghai Export Container Settling Freight Index (European route) was 2662.75 points, a 15.9% decrease from the previous period. In addition, Maersk WEEK43 weekly rates dropped to $2600 per FEU.

Galaxy Futures points out that considering the high level of capacity in October and November combined with the expected decline in demand, the supply-demand pattern is expected to further shift towards a looser situation. Despite the current freight rate levels, shipping companies are still profitable, and short-term spot rates are expected to continue to decline. Cinda Futures believes that after the National Day holiday, with the weaker demand season on the European route, airline capacity supply will increase. If cargo supply cannot match sufficient capacity, the downward trend in freight rates will persist.

3. Mainland real estate stocks opened high and traded low. As of the close, Zhongliang Holdings (02772) fell by 20.3% to HK$0.157; Seazen (01030) fell by 5.44% to HK$2.26; Yuexiu Property (00123) fell by 5.31% to HK$6.06; Sunac (01918) fell by 3.85% to HK$2.25.

HSBC's research report indicates that using the stock market rebound dominated by policies from April to May as a reference, the current valuation of the real estate industry is re-evaluated, focusing on large-cap stocks. The bank points out that only three real estate stocks, including COSCO Ship Engy and China Resources Land, have valuations at or below the high levels in May, while the valuations of other real estate stocks have significantly surpassed the May levels, and these valuations are difficult to explain reasonably.

It is worth mentioning that the real estate market in many places warmed up during the holiday. The latest data from China Index Research Institute shows that the average subscription volume of new housing projects surveyed in most cities during the National Day holiday exceeded the total for September. In first-tier cities, the average subscription volume of monitored projects in Guangzhou and Shenzhen during the holiday reached twice the level of September, while in Beijing and Shanghai, it exceeded the subscription volume for September. The number of second-hand housing transactions in key cities increased significantly compared to last year's National Day holiday, with Qingdao up by 216%, Shenzhen by 168%, and Wenzhou by 144%.

Semiconductor stocks rose and then fell back. As of the close, Hua Hong Semiconductor (01347) fell by 3.6% to HK$24.1; Shanghai Fudan (01385) fell by 3.36% to HK$17.26; while HG Semiconductor (06908) rose by 17.05% to HK$1.03.

A report recently released by the Semiconductor Industry Association (SIA) in the usa showed that in August 2024, global semiconductor sales reached $53.1 billion, a year-on-year increase of 20.6%, and a month-on-month increase of 3.5%. This sales data has seen five consecutive months of growth and hit a historical high in August. In addition, the strong demand for AI is continuously boosting the chip's prosperity cycle. Hon Hai Precision, the parent company of Foxconn, announced the establishment of the world's largest production factory for Nvidia's G200 chips in Mexico to meet the booming demand for Blackwell chips in the AI market.

Sinolink Securities believes that with the mass shipment of Nvidia's B-series chips and the popularization of applications like Wensheng Video in the AI sector, the industry chain will have good opportunities for growth, showing optimism for core beneficiary companies. The semiconductor industry is actively recovering, benefiting the industry chain positively, and remains optimistic about undervalued leading companies, expecting multiple drives for cyclical recovery, performance enhancement, and valuation improvement.

Petroleum stocks declined again. As of the close, CNOOC (00883) fell by 5.16% to HK$19.3; China Oilfield Services (02883) fell by 3.64% to HK$7.14; Sinopec (00386) fell by 3.61% to HK$4.8; PetroChina (00857) fell by 3.14% to HK$6.16.

Overnight, crude oil fell sharply, with both WTI and Brent crude falling by more than 4.6%. This was mainly due to the possibility of easing geopolitical tensions in the Middle East. Some analysts say that the likelihood of an attack on Iran's oil infrastructure is small, and warn that if Israel shifts its focus to other targets, oil prices could face considerable downward pressure.

Guangda Futures recently pointed out that as global crude oil consumption enters the seasonal low period, and based on the latest online meeting of OPEC+, the organization will gradually increase production as planned in December. Therefore, without considering strong geopolitical uncertainties, the impact of crude oil's own fundamentals tends to be bearish. In this context, if the subsequent geopolitical situation eases, oil prices may undergo a rapid recovery in the short term and a downward shift in the medium to long term.

Popular fluctuating stocks

Xpeng-W (09868) rebounded significantly. As of the close, it rose by 4%, to HKD 46.85.

Xpeng Motors announced that it will hold the global debut of the Xpeng P7+ on October 10. Previously, the official introduction stated that the new car is the 'world's first AI car' and the first model to be equipped with Xpeng's new generation autonomous driving hardware platform, which is set to be officially launched in the fourth quarter. Xpeng Motors achieved a monthly delivery record of 21,352 vehicles in September, a year-on-year increase of 39%.

Fit Hon Teng (06088) surged in the morning session. As of the close, it rose by 3.33%, to HKD 2.79.

Hon Hai Precision Industry, the parent company of Foxconn, announced that it is building the world's largest NVIDIA GB200 chip manufacturing factory in Mexico to meet the high demand for Blackwell chips in the AI market. Hon Hai Chairman Liu Young-way stated that Hon Hai is the first company globally to ship NVIDIA GB200 AI chips.

New stocks debut.

Rongli Construction (09639) debuted with a decline. As of the close, it fell by 15.07%, to HKD 0.62.

Rongli Construction was priced at HKD 0.73 per share, issuing a total of 0.25 billion shares, with 5,000 shares per board lot, resulting in an approximate net amount of HKD 0.1497 billion. Rongli Construction is a significant contractor in Hong Kong engaged in civil and cable engineering as well as photovoltaic system projects. According to a Frost & Sullivan report, Rongli Construction is the largest subcontractor for cable and civilian pipeline installations in Hong Kong in 2023, with a market share of about 13.6% based on revenue for the 2023/24 fiscal year.