Understanding the Market | Hengke Index afternoon decline expanded by over 3%, technology stocks generally fell, and the dollar and bond yields remained high
The Hengke Index's afternoon decline expanded by over 3%, with constituent stocks generally falling, and Hua Hong Semiconductor dropping by 8.5%. The Asia-Pacific stock market experienced a sudden drop, the US dollar index broke through 99, and US Treasury yields remained high. Federal Reserve Chairman John Williams stated that there is no need to adjust interest rate policy, and geopolitical factors may affect the market. Huashan Fund pointed out that the continuous inflow of southbound funds provides support for Hong Kong's technology stocks, and attention should be paid to policy changes from the new Federal Reserve Chairman, Waller
According to Zhitong Finance APP, the Hang Seng Tech Index fell over 3% in the afternoon, with constituent stocks generally declining. As of the time of publication, Hua Hong Semiconductor (01347) dropped 8.5% to HKD 116.2; Alibaba Health (00241) fell 6.83% to HKD 4.23; Alibaba-W (09988) decreased 4.21% to HKD 132.1.
In terms of news, the Asia-Pacific stock market experienced a sudden drop on Friday, with the US dollar index surpassing 99, reaching its highest point since April 13. US Treasury yields also remained high, with the 10-year Treasury yield rising above 4.5% and the 30-year yield holding steady at 5%. John Williams, President of the New York Federal Reserve, stated on May 14 that given the uncertainties brought about by the Middle East conflict, he currently believes the Federal Reserve does not need to consider any adjustments to its interest rate policy. Additionally, the US-Iran conflict is unlikely to be resolved quickly, with reports suggesting that geopolitical factors may be the main trigger for adjustments.
Huazhang Fund pointed out that despite ongoing external liquidity constraints, the continuous inflow of southbound funds provides important support for Hong Kong tech stocks. The Federal Reserve's leadership change significantly impacts Hong Kong tech stocks, as the new chairman, Waller, advocates for interest rate cuts, balance sheet reduction, and reforms to the Federal Reserve system, which may serve as a new catalyst for Hong Kong tech stocks. Moving forward, attention should be focused on the progress and catalysts of Waller taking over as Federal Reserve chairman, as the real turning point will require waiting for the interest rate cut window to open, at which point Hong Kong tech stocks are expected to see valuation recovery and capital inflow
