Investment 1/8/2023

The Hong Kong stock market broke through the 20,000-point mark on the last trading day in July, achieving a "seven turnaround". The Hang Seng Index opened 320 points higher. Driven by the boom in technology, Internet and consumer stocks, it rose by as much as 445 points to a 3-month high of 20,361 points. There was profit-taking, and finally recovered and stabilized at 20,000. The market closed at 20,078 points, up 162 points. Technology index closed at 4,549 points, up 83 points. The main board's full-day turnover increased to HK$182.5 billion, the highest in half a year. 

To sum up the performance in July, the Hang Seng Index stabilized at 20,000 points for the first time in one and a half months and closed upstairs. It gained 1,162 points for the whole month, an increase of 6.1%, the largest single-month increase since January this year. The HS Tech index rose to a high in nearly half a year, gaining 638 points or 16.3% for the whole month, outperforming the market by a large margin; based on the low of 3,564 points in May this year, the HS Tech index rose by nearly 1,000 points, or 27.6%, technically entering a bull market. 

The market continues to look forward to the implementation of more policies in the mainland, and the mainland’s PMI in July beat expectations, and market funds entered the market. However, as the mainland real estate and property management stocks turned from rising to falling, the market sentiment was dragged down. The Hang Seng Index rose first and then turned positive on Monday.   The market outlook will wait and see the effect of the implementation of the mainland's substantive policies.

 According to technical analysis, the Hang Seng Index fell from a high of 22,700 in January this year to a low of 18,044 in May. Based on fibo 0.5 for the drop of 4,656 points, the rebound target is 20,374. As long as it does not fully cover yesterday's rising gap of 19,940 to 20,019, it should continue to rise in the short term. The first target is the high of 20,321 on May 8, and then the high of 20,864 on April 17. There is a lot of resistance at this level. If the gap is fully filled, the 100-DMA (19,568) has strong support. The market outlook continues to stabilize at 20,000 points, and the Hang Seng Index may have a chance to test 21,000 points. Look at the January high of 22,700 on the midline. 

 

European stock markets developed individually. British stocks rose 0.07%, French stocks closed up 0.29%, and German stocks fell 0.14%. 

The market is waiting to see the U.S. employment data and company performance that will be released later this week. U.S. stocks lacked a clear direction on Monday. After opening slightly higher by 6 points, the Dow rose as much as 107 points near the close, reaching a high of 35,566. The S&P rose slightly by 6 points to 4,588; the Nasdaq, which is dominated by technology stocks, first fell and then rose 29 points to 14,346. 

Cumulatively in July, the three major indexes all recorded increases. The Dow rose by 3.4%; the S&P rose by 3.1%, and the Nasdaq rose by 4.1%. Longest swell since August. Citigroup has raised the target of 2023 and 2024 to 4,600 points and 5,000 points respectively, which is believed to reflect the increased chance of a soft landing of the US economy and the expected stronger growth of corporate earnings.