Coach Mo • Ceasefire between Israel and Iran + surge in rate cut bets! Hang Seng Index violently breaks through June high, is the bull market officially sounding the horn? 28-06 Review
Hello everyone, time flies so fast, it's time for me, Coach Mo, to share my weekly summary and review. Writing long posts isn't easy, so I sincerely hope everyone can give me more attention and support 🙏🙏
Review of this week's market trends
Last week, I mentioned that the market trend of the $Hang Seng Index(00HSI.HK) would likely further consolidate and test the support level at 23,000 points. This was mainly due to the market being impacted by the Israel-Iran conflict, which heightened risk aversion. As expected, the market started the week with a pullback, especially after the U.S. suddenly struck Iran's nuclear facilities over the weekend, escalating tensions and causing the market to hit a weekly low of ~23,272 points. However, the market quickly recovered the same day, turning losses into gains, proving its strong resilience as funds continued to buy the dip. Later, the market benefited from Trump's sudden announcement of a full ceasefire between Israel and Iran, a positive shock to global stock markets, including Hong Kong's. The market surged strongly that day, with a single-day gain of over 500 points, reaching a new June high of ~24,533 points. The market also saw three consecutive bullish candles, reversing last week's weakening trend into a bullish pattern. Additionally, the A-share market $SSE Index(000001.SH) broke through the long-awaited 3,400-point mark, hitting a new yearly high of ~3,462 points, boosted by financial policy support. Amid these positive trends, the market believed conditions were ripe to surpass this year's high of ~24,874 points. However, the market suddenly cooled off over the next two days, dropping consecutively, which was a bit surprising. Still, it ultimately stabilized above the daily moving average, closing at ~24,284 points. The only consolation was that the market was merely consolidating at high levels, with the bullish uptrend still intact.
This week's market performance—first low, then high—was mainly driven by the sudden de-escalation of the Middle East conflict and Israel-Iran tensions, along with continuous positive news and policies. The dual engines of these positives ignited the rally, with the market breaking June highs led by strong traditional blue-chip financial stocks, particularly domestic and Hong Kong banks like $CCB(00939.HK), $ICBC(01398.HK), $CM BANK(03968.HK), $HSBC HOLDINGS(00005.HK), and $BOC HONG KONG(02388.HK), all hitting new highs. Financial insurance stocks like $PING AN(02318.HK), $CHINA LIFE(02628.HK), and $AIA(01299.HK) also performed strongly. In contrast, heavyweight tech blue-chips like $TENCENT(00700.HK), $BABA-W(09988.HK), and $MEITUAN(03690.HK) underperformed, while $XIAOMI-W(01810.HK) stood out, breaking new highs.
In summary, the market rose 753 points this week, closing at 24,284 points. Trading volume totaled HKD 1.24 trillion, significantly higher than last week, with a daily average exceeding HKD 240 billion, showing strong momentum and bullish sentiment.
Technically, the market formed a "low first, high later" pattern, with this week's low (~23,272) above last week's low (~23,185) and this week's high (~24,533) above last week's high (~24,131). The weekly chart shows a strong bullish candle, signaling an upward trend. However, post-half-year-end, tariffs remain a uncertainty, though rate-cut expectations are rising. The market may consolidate before challenging this year's high (~24,874), with support at the 20-day MA (~23,906).
Next week's outlook
On Friday, the three major U.S. indices—$Dow Jones Industrial Average(.DJI.US), $NASDAQ Composite Index(.IXIC.US), and $S&P 500(.SPX.US)—surged, with Nasdaq and S&P hitting record highs, unaffected by U.S.-Canada tariff tensions. The rally was fueled by mild May core PCE growth and a drop in U.S. personal spending, boosting Fed rate-cut hopes. The "Magnificent Seven" tech stocks led the charge, including $NVIDIA(NVDA.US) (reclaiming its world No. 1 market cap) and $Tesla(TSLA.US) (up on Robotaxi news). $Meta Platforms(META.US), $Apple(AAPL.US), $Microsoft(MSFT.US), $Alphabet - C(GOOG.US), and $Amazon(AMZN.US) also performed well. With U.S. stocks strong and A-share market $SSE Index(000001.SH) rebounding, I believe the market will challenge this year's high next week. Stay tuned 😉😉
This week's highlights
1. The spotlight was on $GUOTAI JUNAN I(01788.HK), which became the first Chinese-backed broker in Hong Kong approved by the SFC to upgrade its license for virtual asset trading services, sparking a sector rally. Its shares skyrocketed ~5x to HKD 7, also lifting peers like $BRIGHT SMART(01428.HK), $CHINA EB LTD(00165.HK), $CICC(03908.HK), and $CMSC(06099.HK) (+10%).
2. IPO surprises included $TRANSTHERA-B(02617.HK), $ZHOU LIU FU(06168.HK), and $BAYZED HEALTH(02609.HK), with strong debuts.
3. $XIAOMI-W(01810.HK) launched its new EV YU7, with 200K pre-orders in 3 minutes, driving shares to a record high of HKD 61.45 (though closing at HKD 58.95).
This week's trades
$SANHUA(02050.HK) — Exited at breakeven after a rebound to IPO price, missing further gains (short-term IPO trading).
Portfolio performance
$LI NING(02331.HK) — Rose past resistance at HKD 17 (peaking at HKD 17.14) before settling at HKD 16.68. Volume surged, showing bullish momentum. Next target: HKD 18.
$BABA-W(09988.HK) — Lagged the rally, consolidating near HKD 110 support. Needs to reclaim HKD 115 to reverse downtrend.
$Sunac China(01918.HK) — Briefly topped HKD 1.50 before retreating to HKD 1.44. Property stocks await rotation; short-term target: HKD 1.70.
Strategy
With low bank deposit rates, high-yield ETFs (e.g., $BOS CSOE HIDV(03437.HK)) are better than individual dividend stocks (e.g., $HSBC HOLDINGS(00005.HK), $LINK REIT(00823.HK), $CHINA MOBILE(00941.HK)), which are already at highs. ETFs offer diversification and stable payouts (e.g., semi-annual dividends) for passive investors.
Conclusion
This week's market resisted further declines despite Israel-Iran tensions, breaking June highs on ceasefire news and rate-cut hopes. Tech blue-chips (ATM) must lead for new yearly highs. With half-year-end window-dressing likely, stay tuned.
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