"Market Review" Hang Seng Index Reaches 22,000 Again, Northbound Capital Net Outflow of 18.1 Billion, Alibaba, Xiaomi, and HSBC Favored

The market anticipates a easing of tensions in the China-U.S. trade war, with the Hang Seng Index today (23rd) rising above the 22,000 mark. U.S. President Trump stated that tariffs on China may be significantly reduced in the future, but will not drop to zero. U.S. Treasury Secretary Mnuchin indicated that the tariff stalemate with China is unsustainable, expecting the China-U.S. trade deadlock to ease. The Dow Jones Industrial Average and Nasdaq both rose 2.7% overnight (22nd). At the time of writing, the yield on U.S. 2-year bonds rose to 3.816%, while the yield on 10-year bonds fell to 4.344%. The U.S. dollar index rose to 99.09, with Dow futures up 676 points or 1.7%, and Nasdaq futures up 2.5%. The dollar rose against the yen to 141.73. The Shanghai Composite Index fell 3 points or 0.1% to close at 3,296 points, while the Shenzhen Component Index rose 0.7%. The total trading volume of the Shanghai and Shenzhen markets reached nearly 1.23 trillion yuan. The spokesperson for the Ministry of Foreign Affairs, Geng Shuang, stated that China's position on the U.S. tariff war is clear: it does not want to fight but is not afraid to fight. If the U.S. truly wants to resolve issues through dialogue and negotiation, it should stop threats and coercion, and engage in dialogue with China on the basis of equality, respect, and mutual benefit.

The Hang Seng Index opened up 517 points, once rising 576 points to a high of 22,138 points, closing up 510 points or 2.4% at 22,072 points. The National Index rose 165 points or 2.1% to close at 8,116 points; the Hang Seng Tech Index rose 150 points or 3.1% to close at 5,049 points. The total trading volume for the day was 260.619 billion HKD. Meanwhile, southbound funds (northbound capital) had a net outflow of 18.1 billion HKD.

Xiaomi-W (01810.HK) saw its stock price rise 6.9% to close at 47.45 HKD, with a trading volume of 17.16 billion HKD. The company's public relations manager Wang Huacheng clarified that the listing time for YU7 remains unchanged, still set for June to July this year.

【Hang Seng Index Returns to 22,000, Alibaba and Xiaomi Favored】

Tencent (00700.HK) rose nearly 3% to close at 474.2 HKD. Mainland e-commerce platforms have fully canceled "refund only," with Alibaba-W (09988.HK) seeing its stock price jump 5.5% to 116 HKD. Meituan-W (03690.HK) and JD.com-SW (09618.HK) each rebounded by 2.8% to 1.5%, while Kuaishou-W (01024.HK) rose 3.5%. Mobile component stocks such as GoerTek (01415.HK), AAC Technologies (02018.HK), and BYD Electronics (00285.HK) rose between 5.8% and 7.2%, while Sunny Optical (02382.HK) and Q Technology (01478.HK) rose 4.1% and 3.2%, respectively.

JP Morgan released a strategy report on the Chinese market, indicating clear signs of easing tensions in the China-U.S. trade war. U.S. President Trump acknowledged the resumption of negotiations with China. China's macro data for March (retail sales, industrial production, fixed asset investment) exceeded expectations, and the bank's QMI (Quantitative Macro Index) further improved, indicating that the economy is in an expansion phase. The bank noted that the worst phase of the re-escalation of China-U.S. trade tensions may have passed Market focus will be on US-China negotiations and China's own policies. The internet sector is the preferred "buy on dips" stock, but attention should be paid to the potential limitations on valuation re-evaluation due to US financial restrictions. The bank continues to favor high dividend yield stocks and sectors with policy flexibility: state-owned domestic banks, domestic real estate, energy, and utilities.

【1,300 rising stocks, HSBC and Standard Chartered perform well】

The Hong Kong stock market showed a positive trend today, with a rise-to-fall ratio of 32 to 15 for main board stocks (compared to 31 to 16 yesterday). There were 1,343 rising stocks (up 3.4%), with 67 Hang Seng Index constituent stocks rising and 15 falling, resulting in a rise-to-fall ratio of 81 to 18 (compared to 76 to 22 yesterday). The market recorded short selling of HKD 35.699 billion today, accounting for 15.405% of the total turnover of shortable stocks at HKD 231.742 billion (compared to 21.014% yesterday).

HSBC (00005.HK) and Standard Chartered (02888.HK) saw their stock prices rise by 4.3% and 4.6% respectively, while Hong Kong Exchanges and Clearing (00388.HK) and AIA (01299.HK) rose by 2.1% and 2.8%.

JP Morgan released a report stating that HSBC will announce its first-quarter results on the 29th of this month, with the bank's net interest income expected to be USD 10.4 billion for the first quarter of 2025 (a quarterly decline of 4%). This reflects factors such as lower interest rates, the sale of its Argentine business (to be sold in April 2024), and a reduction in interest days, partially offset by hedging gains. For the fiscal years 2025 to 2027, the bank continues to forecast average US interest rates of 4%, 3.5%, and 3.5%, compared to the current forward (OIS) average rates of 4.1%, 3.2%, and 3.25%; it predicts the average 1-month HIBOR to be 3.5%, 3.25%, and 3%, compared to forward average rates of 3.5%, 2.8%, and 2.7%. The bank expects HSBC's fee income to be USD 6 billion (an annual increase of 4%), mainly driven by wealth management business. The bank maintains an "overweight" rating on HSBC with a target price of HKD 115