Investment 8/5/2025

The mainland announced a series of policies to stabilize the market. The Hang Seng Index opened 507 points higher at 23,169 points, and then rose 534 points to 23,197 points. The gains then gradually narrowed and closed at the intraday low of 22,691 points, up 29 points or 0.12%, recording five consecutive increases; the Technology Index fell 39 points or 0.75% to 5,200 points. The Main Board's turnover was HK$240 billion.

The mainland has taken measures to rescue the market, and a series of stimulus measures have released 1 trillion yuan of liquidity, driving the Hang Seng Index to make up for the earlier decline. In addition, senior officials from China and the United States will negotiate on tariff issues. Under positive circumstances, market sentiment will be restored to the level before the tariff impact. It is expected that the Hang Seng Index can return to 24,000 points. If there is significant progress in tariffs, the best level can reach 25,000 to 26,000 points. However, assuming that market sentiment does not change, in the baseline scenario, the Hang Seng Index will hover around 20,500 points. Once the negotiations deteriorate and the mainland's policy efforts fall short of expectations, the Hang Seng Index will fall to 18,000 to 19,000 points.

European stock markets were weak, with UK, French and German stocks falling 0.44%, 0.91% and 0.58% respectively.

After two consecutive days of interest rate meetings, the U.S. Federal Reserve announced that the interest rate would remain unchanged, maintaining it between 4.25% and 4.5% for three consecutive times. The authorities emphasized that the risks of rising unemployment and inflation have increased, indicating that President Trump's tariff policy has had an impact on the U.S. economy. U.S. stocks fluctuated sharply throughout the day. The Dow Jones Industrial Average opened higher on Wednesday and continued to rise. It soared as much as 405 points before the interest rate decision was announced. After the announcement, the gains almost completely evaporated, and at one point it rose by less than 1 point, hitting a low of 40,829 points. After Chairman Powell's speech, the Dow Jones Industrial Average once rose 437 points, reaching a high of 41,266 points. The rise slowed down at the close of the market, while the S&P 500 and Nasdaq Composite Indexes fluctuated upward.

At the close of U.S. stocks, the Dow Jones Industrial Average was still up 284 points, or 0.7%, to 41,113 points; the S&P 500 rose 24 points, or 0.43%, to 5,631 points; and the tech-heavy Nasdaq rebounded 48 points, or 0.27%, to 17,738 points.

The U.S. dollar index rose 0.71% to 99.95 in the final trading session; the euro fell 0.62% to $1.13; the yen fell 1.07% to 143.94 per dollar. The Bank of England is expected to cut interest rates by 0.25% on Thursday, and the pound fell 0.64% to $1.3284. Bitcoin rose 3.18% to $97,714.