The Market Review: The Hang Seng Index fluctuates with a preference for decline, Tencent falls nearly 4%, software stocks face selling pressure

Tencent (00700.HK) and other tech stocks weakened, dragging down the Hang Seng Tech Index today (4th), but the Hang Seng Index fluctuated with a slight preference for the upside throughout the day. American AI startup Anthropic launched a new tool for in-house lawyers that automates legal tasks such as contract review, classification of non-disclosure agreements (NDA), and drafting briefs, which negatively impacted the SaaS and software sectors. The Dow Jones Industrial Average and Nasdaq both fell by 0.3% and 1.4% respectively on the night of the 3rd. At the time of writing, the yield on the U.S. 2-year Treasury bond rose to 3.578%, and the yield on the U.S. 10-year Treasury bond rose to 4.276%, while the U.S. Dollar Index fell to 97.39. Dow futures were up 92 points or 0.18%, while Nasdaq futures were down 18 points or less than 0.1%. The Shanghai Composite Index rose 34 points or 0.85% to close at 4,102 points, the Shenzhen Component Index rose 0.2%, and the ChiNext Index fell 0.4%, with a total trading volume of 2.48 trillion RMB in the Shanghai and Shenzhen markets.

The Hang Seng Index opened down 37 points, initially falling 241 points to a low of 26,593 points, then rising 169 points at midday to a high of 27,004 points, ultimately closing up 12 points or 0.05% at 26,847 points; the Hang Seng China Enterprises Index fell 4 points or 0.05% to 9,048 points; the Hang Seng Tech Index fell 100 points or 1.8% to close at 5,366 points. The total market turnover for the day decreased by over 14% to 285.433 billion HKD. The total turnover of northbound trading was 114.075 billion HKD, while southbound funds had a net inflow of 13.373 billion HKD (compared to a net inflow of 0.952 billion HKD on the previous trading day), marking the highest level since January 21 (when it was 13.93 billion HKD).

The Tracker Fund of Hong Kong (02800.HK) rose 0.3% to close at 27.08 HKD, with a turnover of 21.447 billion HKD and a total short selling amount of 1.4 billion HKD, with the short selling ratio dropping to 6.529% (compared to a 3-day average of 23.414%). Southern Hang Seng Technology (03033.HK) fell 1.8% to close at 5.25 HKD, with a total short selling amount of 9.4 billion HKD and a short selling ratio rising to 56.147% (compared to a 3-day average of 39.646%).

【Tencent Continues to Be Under Pressure, Software Stocks Sold Off】

Tencent closed at a daily low of 558 HKD, down nearly 4%, with a turnover of 34.031 billion HKD and a total short selling amount of 2.709 billion HKD, with the short selling ratio rising to 7.959% (compared to a 3-day average of 7.551%). Alibaba-W (09988.HK) fell 0.9% to close at 159.5 HKD, with a turnover of 11.42 billion HKD.

The software and tech application sectors were hit hard, with NetEase-S (09999.HK) down 3.3%, Baidu-SW (09888.HK) down 3%, and Bilibili-W (09626.HK) down 3.7%. Meitu (01357.HK) and Xindong (02400.HK) fell 11.4% and 7.6%, respectively, while travel platforms Tongcheng (00780.HK) and Trip.com (09961.HK) dropped 5.7% and 6.1%, respectively Kingdee (00268.HK) and Weimob (02013.HK) fell by 12.6% and 8.3%, while Chinasoft (00354.HK), Jinsoft (03888.HK), and Kingsoft Cloud (03896.HK) dropped by 5.1% to 6.7%.

【Declining stocks are one in a thousand, commodity stocks continue to rise】

The Hong Kong stock market is broadly positive, with a rise and fall ratio of main board stocks at 27 to 24 (compared to 33 to 16 the previous day), with 1,106 rising stocks (an increase of 2.7%). Today, 64 constituent stocks of the Hang Seng Index rose, while 23 fell, with a rise and fall ratio of 73 to 26 (compared to 69 to 31 the previous day). The market recorded short selling of HKD 44.443 billion today, accounting for 17.564% of the total turnover of shortable stocks at HKD 253.035 billion (compared to 18.75% the previous day).

Gold and silver prices continue to rebound, with China Gold International (02099.HK) and Zhaojin (01818.HK) rising by 2.4% and 1.3% respectively, while China Silver (00815.HK) fell by 1.5%. Resource stocks such as MMG (01208.HK) rose by 5.1%, and China Molybdenum (03993.HK) rose by 2.5%.

Coal stocks such as Yancoal (01171.HK) listed the transfer of Xintai Coal with the highest bid of 3.05 billion RMB, and the stock price surged by 10.6%. A new round of cold wave is expected in mainland China, with heavy snowfall anticipated in several provinces. Shenhua (01088.HK) rose by over 5%, China Coal (01898.HK) rose by 8%, and MONGOL MINING (00975.HK) rose by 7.5%