[True Wisdom Institutional View] China and Hong Kong stock markets remain volatile; Hang Seng Index expected to find support at 25,000 points

Mainland and Hong Kong stock markets fell in a volatile manner last Friday. In the A-share market, the Shenzhen Component Index performed well in the early session, but its trend deteriorated in the afternoon, eventually closing at 13,866 points, down 0.25%. The Shanghai Composite Index also saw its decline widen in the afternoon, closing at 3,957 points, down 1.24%. Both indices closed near their daily lows, with combined turnover across the two markets exceeding RMB 2.2 trillion. For the week, the Shanghai Composite Index fell 3.4%, while the Shenzhen Component Index dropped about 2.9%. As for the Hong Kong market, it was also volatile last Friday. After opening 163 points lower, it briefly reversed to gain 63 points. However, as the decline in $BABA-W(09988.HK) and $XIAOMI-W(01810.HK) continued, and the A-share performance worsened, both affected the overall market. The Hang Seng Index fell as much as 379 points in the afternoon, hitting a low of 25,121 points, and eventually closed at 25,277 points, down 223 points or 0.88%. The Hang Seng TECH Index fell even more, dropping 2.48% to close at 4,872 points. The full-day turnover reached HK$342.5 billion. For the week, the Hang Seng Index accumulated a loss of about 0.74%, while the Hang Seng TECH Index fell 2.1%.

Among the constituent stocks, $CATL(03750.HK) performed the best, accumulating a gain of 12.4% for the week. Geely (00175.HK) also rose 12%, making it the second-best performing constituent stock. Li Ning (02331.HK) also gained over 10%. Other constituent stocks with good performance included New Oriental (09901.HK), BYD (01211.HK), and AIA (01299.HK), with their share prices rising 8.5%, 7.3%, and 5.2% respectively. Among the declining constituent stocks, Hongqiao (01378.HK) performed the worst, falling 12.7%. Zijin (02899.HK) also fell over 10%. SMIC (00981.HK), China Molybdenum (03993.HK), and Kuaishou (01024.HK) fell 8.5%, 8.7%, and 9% respectively.

As there are still many uncertainties in the Middle East situation, the market is expected to remain very volatile. At the same time, this week is the peak period for earnings releases, and their performance will also impact market conditions. The Hang Seng Index is expected to continue fluctuating between 25,000 and 26,000 points.

Source: Bright Smart Securities