Investment Note 10/6/2025

China and the United States will start trade negotiations in London, which is good for the market sentiment. The Hang Seng Index opened 185 points higher at 23,977 points and continued to rise, eventually closing at the all-day high of 24,181 points, up 388 points or 1.63%; the Technology Index rose 146 points or 2.77% to 5,433 points. The main board turnover was HK$245.8 billion.

The dialogue between the Chinese and US heads of state has investors looking forward to the improvement of global trade relations and believes that the news in June will be positive. Unless there are major changes in the Sino-US trade negotiations, Hong Kong stocks should continue to rise strongly. The Hang Seng Index is expected to challenge 24,500 to 24,800 points in the short term, and the support below is at 23,500 points. In the optimistic scenario, the Hang Seng Index may reach 26,200 points before the fourth quarter, which is about 10% higher than the current potential upside, equivalent to the top of the rising channel extended in January last year, and also the golden ratio of 61.8% from the historical high of 33,484 points in January 2018 to the bottom rebound in October 2022.

European stock markets were weak, with British, French and German stocks falling by 0.06%, 0.17% and 0.54% respectively.

The three major U.S. stock indexes developed separately on Monday. After opening 23 points higher, the Dow Jones Industrial Average turned around and fell by as much as 195 points, hitting a low of 42,567 points. It turned up 130 points in the late stage, hitting a high of 42,893 points; the S&P 500 rose by 0.35% at one point, and the Nasdaq, which is dominated by technology stocks, rose by as much as 0.55%. Many major Wall Street banks sang the outlook for the U.S. stock market, among which Citigroup expected the S&P 500 to rise by another 5% before the end of the year.

At the close of the U.S. stock market, the Dow Jones Industrial Average fell slightly by 1 point to 42,761 points; the S&P 500 rose by 5 points (0.09%) to 6,005 points; and the Nasdaq rose by 61 points or 0.31% to 19,591 points.

The U.S. dollar index fell by 0.38% to 98.817, the euro rose by 0.39% to $1.1441, and the yen rose by 0.6% to 143.98 per dollar. Bitcoin rose by 3.2% to $108,784.