{Economic Information Daily, 20th} Hong Kong stocks resumed trading after holidays with a significant weakening. The rebound sentiment in US stocks on Monday failed to spread to Asian markets. Regional markets were generally weak this morning, with Japanese stocks down 1.3% and South Korean stocks down 3.7%. The Hang Seng Index opened nearly 200 points lower this morning. After the opening, AI hardware stocks continued to decline, dragging the Hang Seng Index to trade below 24,000 throughout the day. It remained in a narrow range at low levels during the afternoon session, finally closing at 23,867, down 319 points or 1.3%. Board turnover reached nearly HK$190.5 billion. The H-share Index closed at 8,030, down 97 points or 1.2%. The ChiNext Index closed at 4,045, down 62 points or 1.5%.
With earnings season approaching, market sentiment remains cautious. Besides the daily turnover continuing to stay below HK$200 billion, northbound funds also showed weakness, with net outflows exceeding HK$1.7 billion again today, marking the fifth consecutive trading day of net outflows, weakening support for Hong Kong stocks. Since October, the Hang Seng Index has been fluctuating within the range of 23,800 to 24,500. The current price is approaching the 23,800 level. If the range support remains intact, there may be a slight rebound tomorrow. Investors are watching whether volatility trading could attract northbound funds back into Hong Kong stocks.
*HSBC plunges 3% on windfall tax fears*
Hardware stocks were sold off, with Lenovo Group (00992) hitting a new low of over three months, closing at HK$25.26, down 10%, making it the worst-performing blue chip stock of the day. Other hardware stocks were generally down; Yangtze Optical Fibre (06869) rose 0.3% to HK$124.4; Cambridge Industries (06166) fell 6.3% to HK$78.85; Kingboard Laminates (01888) rose 0.9% to HK$39.82; Zhongji Intelligent Creation (03308) fell 1.7% to HK$791; Sunway Technology (02476) rose 3.6% to HK$156.5.
According to the UK's Guardian, UK Chancellor of the Exchequer Rachel Reeves plans to officially announce a windfall tax on banks in the budget on October 28. The yield on 10-year UK government bonds surged by 6.21 basis points in a single day, approaching the highest level since the 2007-2008 financial crisis. International banking stocks continued to suffer, with HSBC (00005) gapping down 3.3% to HK$144.7; Standard Chartered (02888) fell 4.3% to HK$214.
Zijin Gold International (02259) announced its earnings, with a 1.2-fold year-on-year increase in net profit to US$2 billion in the first three quarters, and revenue up 70% to US$5.8 billion. However, excluding the first two quarters, third-quarter profit decreased 12% quarter-on-quarter to US$564 million, below market expectations. The stock plunged 9.3% after the results to HK$134.6, dragging down other gold mining stocks; Zijin Mining (02899) fell 3.6% to HK$30.82; Zhaojin Mining Industry (01818) fell 2.1% to HK$17.8; Shandong Gold (01787) fell 0.5% to HK$18.68; Lingbao Gold (03330) fell 1.5% to HK$18.05; Chifeng Gold (06693) fell 3.9% to HK$33.6.
*Nongfu Spring challenging breakout from downtrend channel, worth noting*
Mainland China reported that September's total retail sales of consumer goods rose 1.1% year-on-year, better than the expected 0.6% and the highest level in six months; retail sales of consumer goods excluding automobiles grew 3.9% year-on-year. The news boosted domestic demand stocks, among which Nongfu Spring (09633) rose 1.7% for the day to HK$41.88.
Nongfu Spring has maintained a volatile downward consolidation trend this year, with its share price moving along a downtrend channel, but it has not broken below the bottom of the downward channel. The stock experienced a downtrend in September, finding double-bottom support near the low of HK$38.4 before rebounding. In fact, HK$38.36 is also the 0.5 retracement level of the 2024-2025 uptrend wave, and the September correction already confirmed the strength of support at this level. Recently, Nongfu Spring's share price has rebounded, supported by its sugar-free tea business, which has shown accelerating growth quarter by quarter. The stock is now moving towards the pre-downtrend high of around HK$43.9. If it further breaks above the downward trend channel, technically it could launch a larger uptrend. Investors looking to position early may consider following up at current levels, while more cautious investors could wait until it breaks above HK$43 before entering. (hc)
With earnings season approaching, market sentiment remains cautious. Besides the daily turnover continuing to stay below HK$200 billion, northbound funds also showed weakness, with net outflows exceeding HK$1.7 billion again today, marking the fifth consecutive trading day of net outflows, weakening support for Hong Kong stocks. Since October, the Hang Seng Index has been fluctuating within the range of 23,800 to 24,500. The current price is approaching the 23,800 level. If the range support remains intact, there may be a slight rebound tomorrow. Investors are watching whether volatility trading could attract northbound funds back into Hong Kong stocks.
*HSBC plunges 3% on windfall tax fears*
Hardware stocks were sold off, with Lenovo Group (00992) hitting a new low of over three months, closing at HK$25.26, down 10%, making it the worst-performing blue chip stock of the day. Other hardware stocks were generally down; Yangtze Optical Fibre (06869) rose 0.3% to HK$124.4; Cambridge Industries (06166) fell 6.3% to HK$78.85; Kingboard Laminates (01888) rose 0.9% to HK$39.82; Zhongji Intelligent Creation (03308) fell 1.7% to HK$791; Sunway Technology (02476) rose 3.6% to HK$156.5.
According to the UK's Guardian, UK Chancellor of the Exchequer Rachel Reeves plans to officially announce a windfall tax on banks in the budget on October 28. The yield on 10-year UK government bonds surged by 6.21 basis points in a single day, approaching the highest level since the 2007-2008 financial crisis. International banking stocks continued to suffer, with HSBC (00005) gapping down 3.3% to HK$144.7; Standard Chartered (02888) fell 4.3% to HK$214.
Zijin Gold International (02259) announced its earnings, with a 1.2-fold year-on-year increase in net profit to US$2 billion in the first three quarters, and revenue up 70% to US$5.8 billion. However, excluding the first two quarters, third-quarter profit decreased 12% quarter-on-quarter to US$564 million, below market expectations. The stock plunged 9.3% after the results to HK$134.6, dragging down other gold mining stocks; Zijin Mining (02899) fell 3.6% to HK$30.82; Zhaojin Mining Industry (01818) fell 2.1% to HK$17.8; Shandong Gold (01787) fell 0.5% to HK$18.68; Lingbao Gold (03330) fell 1.5% to HK$18.05; Chifeng Gold (06693) fell 3.9% to HK$33.6.
*Nongfu Spring challenging breakout from downtrend channel, worth noting*
Mainland China reported that September's total retail sales of consumer goods rose 1.1% year-on-year, better than the expected 0.6% and the highest level in six months; retail sales of consumer goods excluding automobiles grew 3.9% year-on-year. The news boosted domestic demand stocks, among which Nongfu Spring (09633) rose 1.7% for the day to HK$41.88.
Nongfu Spring has maintained a volatile downward consolidation trend this year, with its share price moving along a downtrend channel, but it has not broken below the bottom of the downward channel. The stock experienced a downtrend in September, finding double-bottom support near the low of HK$38.4 before rebounding. In fact, HK$38.36 is also the 0.5 retracement level of the 2024-2025 uptrend wave, and the September correction already confirmed the strength of support at this level. Recently, Nongfu Spring's share price has rebounded, supported by its sugar-free tea business, which has shown accelerating growth quarter by quarter. The stock is now moving towards the pre-downtrend high of around HK$43.9. If it further breaks above the downward trend channel, technically it could launch a larger uptrend. Investors looking to position early may consider following up at current levels, while more cautious investors could wait until it breaks above HK$43 before entering. (hc)
