Investment 11/4/2025

The United States suspended the imposition of "reciprocal tariffs" on most countries except China for 90 days and raised China's tariffs to 145%. The Chinese and Hong Kong stock markets continued to open higher and close higher following the external markets, but underperformed the major Asian stock markets. After opening 545 points higher at 20,810 points, the Hang Seng Index expanded its gain to 946 points at one point, reaching a high of 21,211 points. However, it was unable to move upward and the gain narrowed to 266 points at one point. It finally closed at 20,681 points, up 417 points or 2.1%, a cumulative increase of 853 points for three consecutive days. The technology index rose 124 points, or 2.66%, to 4,813 points. The main board traded HK$395.5 billion .

Although the Hong Kong stock market has risen for three consecutive days, it has already clearly pulled back earlier due to the impact of tariff policies. At the beginning of this week, it was even more rare that from the perspective of the overall rise and fall ratio of more than 2,500 Hong Kong stocks, the decline ratio on that day was as high as more than 90%, the so-called "9:1 decline day". The market breadth was extremely unbalanced that day, and the Hang Seng Index fell by double digits in a single day, setting the second largest drop in history, showing that market sentiment was extremely fragile and confidence was seriously lacking. Historical experience shows that a "9:1 market crash day" accompanied by a sharp drop in the Hang Seng Index often only occurs during a financial crisis. This may have sent a warning signal: Hong Kong stocks may be caught in a new round of financial crisis. Taking into account the difference in the growth of US and Chinese technology stocks and the Hang Seng Index's volatility this year, it is estimated that the Hang Seng Index may have a chance to fall to the 15,000 to 17,000 point range this year. Investors must pay close attention to whether the Hang Seng Index can stay above the 250-DMA (19,521) that separates the bull and bear markets.

Stock markets around the world followed the U.S. stock market's rebound on Wednesday, with British, French and German stocks rising 3.04%, 3.83% and 4.53% respectively; Japan's Nikkei index soared 9.13%, the biggest market rally since August last year.

The year-on-year growth rate of the U.S. Consumer Price Index (CPI) in March slowed to 2.4% from 2.8% in February, lower than the expected increase of 2.5%. However, White House officials clarified that the actual tariff on China was increased to 145%. In addition, after the historic rebound on Wednesday, U.S. stocks fell significantly on Thursday amid risk aversion. The Dow Jones Industrial Average opened 611 points lower and the decline widened to 2,180 points, hitting a low of 38,427 points, falling below the 40,000 mark again. The S&P 500 fell 6.26% at one point, and the Nasdaq fell as much as 7.19%.

At the close of U.S. stocks, the Dow Jones Industrial Average still fell 1,014 points, or 2.5%, to 39,593 points; the S&P 500 fell 188 points, or 3.46%, to 5,268 points; and the Nasdaq fell 737 points, or 4.31%, to 16,387 points.

The US dollar index fell sharply by 2.14% to 100.7, while the euro rose by 2.68% to $1.1243. The yen rebounded 2.53% to 144.02 per dollar. On the other hand, as the market continued to fluctuate, gold continued to be sought after, with the spot gold price rising 3.02% to US$3,176.34 per ounce at one point, setting a record high.