CITIC Lyon Fengshui Index 2026 released, expects Hong Kong stocks to decline first and then rise, beware of a sharp drop in 3 months

Entering the Year of the Fire Horse, CITIC Securities and CLSA have released their 2026 Feng Shui Index. The firm indicates that the "Year of the Fire Horse" is traditionally unpredictable, expecting the Hang Seng Index to experience fluctuations in the first month starting in February, with a recovery anticipated by early summer, moving forward gradually. "If one hopes for a bountiful harvest this year, it is advisable to appropriately delay the sowing time and act cautiously between spring and summer," noting that there may also be declines in July and December, but the year is expected to conclude successfully with a significant lead. Second Half: "Two Steps Forward, One Step Back" CITIC Securities and CLSA describe Hong Kong stocks this year as "like a galloping horse," implying a vigorous momentum in 2026. "If one can boldly take action, they will surely be able to navigate the turbulent trends of the coming year, riding forward with vigor." The firm mentions that Hong Kong stocks may initially decline at the beginning of the year, gradually rising after April, but by July, "the natural climate will have excessive fire energy, combined with artificial disturbances, intertwining to potentially cause a sharp downturn in momentum." As for the second half of the year, the firm describes the trend as akin to an equestrian performance, "two steps forward, one step back," expecting the high points of Hong Kong stocks in the Year of the Horse to appear between November and early December, but in December, "the influx of gold energy into winter waters, with cold currents permeating the world, will eventually extinguish the flames of the Fire Horse," leading to a slight softening, followed by a potential sprint towards near annual highs towards the end of the Year of the Horse. Wood Industries to Thrive in the Year of the Horse CITIC Securities and CLSA again utilize the five elements for stock selection, predicting that the "great fortune" will belong to the wood industries, including agriculture, furniture, plants, and pharmaceuticals, which are expected to be the most prosperous throughout the year. Industries associated with metal, such as finance, machinery, and military, are also expected to have a good outlook for the entire year except for summer; while industries related to fire, such as energy production and telecommunications, as well as jewelry, eyewear, and lighting, are expected to perform brightly, with strong demand, though caution is advised for fluctuations in the last two months of the year. On the other hand, industries associated with earth, such as real estate, building materials, hotels, and various jewelry sectors, are unlikely to benefit from favorable trends, only showing strength in a certain month during autumn; while industries associated with water, such as shipping, tourism, beverages, and toys, are expected to be the weakest among the five elements, with the shipping industry likely to struggle throughout most of the Year of the Horse, akin to being stuck in a windless zone, while the tourism industry will also be adversely affected. Southeast and East Directions Most Beneficial for Real Estate Regarding the real estate market, CITIC Securities and CLSA indicate that if Hong Kong is divided into nine directions, the outlook for the southeast and east is very auspicious, the center and west are favorable, while the northeast, north, and southwest are slightly favorable