Investment 16/11/2023

U.S. inflation was milder than expected, and expectations for an interest rate hike by the Federal Reserve have cooled, spurring Hong Kong stocks to perform significantly ahead of the meeting between the Chinese and U.S. presidents. 

The Hang Seng Index opened 439 points higher at 17,836 points and then continued its upward trend. It once rose 705 points to 18,102 points and rose 682 points throughout the day to 18,079 points. The technology index rose 174 points to 4,125 points. Main board transaction volume exceeded HK$134.9 billion.

 Hong Kong stocks "are struggling to make a breakthrough". Although the market hopes that some existing U.S. trade and technology restrictions on China will be relaxed after the meeting between the presidents of China and the United States, the financial war between China and the United States shows no sign of easing. Coupled with yesterday's news that the U.S. federal pension fund plans to no longer invest in Hong Kong stocks, there is a chance that more institutional investors will follow suit, exacerbating the outflow of foreign capital from Hong Kong stocks. Looking forward to the market outlook, "Xi's visit" has become a catalyst for short-term speculation, and the short-term sentiment of Hong Kong stocks is expected to be positive. However, investors should be aware that investors may have the opportunity to take advantage of the rebound to sell goods and leave the market. If the market situation is to remain strong, the key is whether foreign long-term funds are willing to increase their holdings of Hong Kong stocks. The mainland's economic stimulus measures alone are not enough to boost the market for the time being. 

In terms of trend, it is expected that there will still be a rebound today. The resistance above the 50-DMA (18,290) of the Hang Seng Index is not light. If it fails to return above it, it is difficult to say that the trend will improve. Last month it tested the 16,800 level, but it may not have reached this year's low, and it is still in a wave-by-wave pattern. 

European stock markets rose across the board, with German stocks closing up 0.86% as the best performers, British stocks and French stocks rising 0.62% and 0.33%. 

Although U.S. bond interest rates stopped falling and rebounded, retail stocks continued to rise, driving U.S. stocks to continue to rise on Wednesday. After the Dow opened 79 points higher, the increase once expanded to 223 points and regained the 35,000 level, reaching a high of 35,051 points. The closing trend continued. The index still rose 163 points to 34,991 points, marking its fourth consecutive day of gains; the S&P 500 index rose 7 points to 4,502 points; the Nasdaq Composite, dominated by technology stocks, rose 9 points to 14,103 points.