Hong Kong stocks closed a long shadow line in July, although once broke through the annual line, but not sustainable, the Hang Seng Index operating space in 24526.91-26782.62 points, showing an overall shock trend of rising and falling.

Judging from the trend, there was a wave of rally in the Hang Seng Index at the beginning of the month, but then it began a trend of adjustment, mainly due to a series of unfriendly actions by the United States, which continued to put pressure on Hong Kong stocks. In addition, the active cooling of the stock market by regulators is also a booster. At the same time, public health events continue to have a negative impact on the economy.

Despite the mediocre performance of the Hang Seng Index in July, individual stocks were very active and a number of bull stocks emerged. For example, Everbright Securities in July of Zhitong Finance and Economics; Huabao International in the field of e-cigarettes; China Shipping Defense in the military industry; Pharmaceutical stocks in Zhitong Finance and Economics in July; Grand Pharmaceutical in July; Super Power in Zitong Finance and Economics in July; Great Wall Motor in cars; the first tractor in agricultural machinery stocks, and so on. In terms of blockbuster blue chips, BABA, Tencent, Meituan and Hong Kong Exchanges and Clearing all performed strongly.

Taking into account the traditional July turnaround, the market is not satisfactory, then the market expectations for August will be lower. Zhitong Finance believes that the overall market in August is expected to be mainly shock.

The current external environment is extremely complex, especially from the United States to maintain long-term repression is an unavoidable topic, from time to time will come up with some unexpected things. Because the US election is just around the corner, Trump obviously lags behind Biden in the opinion polls, and in the unfavorable situation of epidemic prevention, he can only turn his back again and again to boost his approval rating. And the more dangerous sign is to unite with other countries to confront them.

Another relatively big risk is US stocks. It was mentioned in the July strategy report that US stocks do not have a big risk and that the upward trend can be maintained. This is indeed the case. However, in August, this risk increased abruptly, on the one hand, the re-outbreak of public health incidents, which dealt a heavy blow to the real economy. It was not easy for the economy to recover, but it is expected to create new pressure.

The latest second-quarter GDP data released in the United States showed an annualized rate of-32.9%, down 9.5% from the same period last year, the biggest decline since the data began in 1947. The Federal Reserve and the Treasury are expected to step up their efforts, but this risk has been exacerbated by the slow arrival of a new round of US economic rescue packages. Another bad thing is that the dollar index has weakened across the board, indicating that global funds are no longer favored by the dollar.

On the other hand, if the suppression of China escalates, it is bound to be counteracted, and it will also have a negative impact on the US economy. Under globalization, the expectation of the overall economy will be reduced after the intensification of the great power game.

In other respects, Britain and the European Union held a new round of formal Brexit talks in August, and market expectations were low as differences between the two sides remained wide. At the same time, the situation in the South China Sea and China-EU relations are facing uncertainty. Hong Kong stocks will struggle to move forward amid all kinds of uncertainty in August.

However, the management has already had the full understanding and response to this, and timely proposed to carry out the internal circulation of the economy. from the perspective of monetary policy, it is estimated that the US dollar will be loose in the first half of the year, from flooding to precision drip irrigation. However, "housing speculation" continues to be carried out, and the overall idea is to shift funds to domestic demand in the real economy, or finance corresponding to the virtual economy. Realize the autonomy of consumption, science and technology, finance and national defense.

From an event-driven point of view, the financial market in August is destined to be not too calm, because it will usher in the formal implementation of the gem registration system, and the Hang Seng Science and Technology Index for Hong Kong stocks has been officially launched. BABA, Meituan and XIAOMI can be included in the scope of stock selection in August, the return of Chinese-listed stocks will be in full swing, and there will be Daqing, the 40th anniversary of Shenzhen, and so on. Hype on various themes will become active.

On the whole, Hong Kong stocks will have to withstand the test of various accidents in August, and it is very difficult for the index to make a big difference, and it is expected to maintain the concussion pattern of large boxes.

Investment strategy in August: focusing on domestic demand and biased to defense

The top ten gold stocks of Zhitong Finance continued to outperform the market in July. Over the same period, the Hang Seng Index rose 9.6%. The ten biggest gold stocks rose as much as 34.23% on average in July. The biggest gains of Zhitong's top 10 gold stocks in July were as follows: Everbright Securities rose 132.1%, Chaowei Power rose 40.1%, Broad Pharmaceuticals rose 38.3%, Man Wah rose 29%, IGG rose 28.5%, Shandong Weigao Group Medical Polymer rose 26.7%, Pharmaron Beijing Co., Ltd.* rose 16.3%, Weishijie rose 15.1%, Jindi Merchants rose 9.1%, and Galaxy Entertainment rose 7.1%.

Considering the uncertainty of the overall situation in August, it is difficult to have a trend market, therefore, the operation needs to be particularly cautious, the choice of individual stocks is particularly important, if the direction deviation will be quite passive. The overall strategy is based on domestic demand, biased towards defense. The specific directions of choice are: first, medical treatment and masks that continue to follow the line of public health; second, games, education, and catering of domestic demand; third, securities firms that drive the index; fourth, technology chips and software; fifth, cement and shipping with marginal improvement in performance.

The details are as follows:

Science and technology: China Software International (00354), Semiconductor Manufacturing International Corporation (00981)

Epidemic prevention: China Resources Medical (01515), BYD Electronic (00285)

Games: middle-hand games (00302)

Education: new higher Education Group (02001)

Brokerage: Citic Construction Investment (06066)

Catering: Haidilao International Holding (06862)

Cement: Western cement (02233)

Shipping: COSCO Shipping Holdings (01919)