[True Insight Institutional View] Surging U.S. Treasury yields suppress valuations, Stock Connect (for Hong Kong) sees net outflow of 2.883 billion yuan on Friday

The U.S. stock market's S&P 500 and Nasdaq indices recorded their fifth consecutive week of declines, marking the longest losing streak since 2022, as investor risk aversion intensified. Affected by the Iran conflict, Brent crude oil returned to levels above $110, with inflation pressures pushing the yield on the 10-year U.S. Treasury note to a nine-month high. The Middle East conflict caused oil prices to surge, triggering expectations of an inflation rebound and a 'higher for longer' interest rate environment. Meanwhile, the market capitalization of the tech 'Magnificent Seven' evaporated by over $850 billion in a single week. Beyond legal disputes, the market is shifting its focus from AI visions to a strict scrutiny of capital returns. On a macro level, geopolitical risks and inflation are piling pressure, while soaring U.S. Treasury yields are suppressing valuations.

Southbound Stock Connect recorded a net outflow of 2.883 billion yuan on Friday. Among the stocks, $POP MART(09992.HK) saw the largest inflow, reaching 457 million HKD; followed by $MEITUAN(03690.HK), with a net inflow of 341 million HKD. $TRACKER FUND(02800.HK) recorded the largest net outflow, at 3.56 billion HKD; followed by Alibaba Group Holding Limited (09988.HK), with a net outflow of 656 million HKD.

Source: KGI Securities