Title: Foreign Capital Drives Record High for Hong Kong Stocks, Hang Seng Technology Index ETF Surges 7%
Hong Kong stocks saw a significant rebound today, with the Hang Seng Index opening 0.07% higher and the Hang Seng Technology Index opening 0.28% higher. This follows the Hang Seng Index closing higher for the ninth consecutive trading day, setting a new record for the longest consecutive rise since 2018.
The Hang Seng Technology Index ETF (159742) opened higher, surging by more than 7% with a turnover of over 17 million. In the past 60 days, the ETF has seen an increase of over 20%, with trading activity remaining robust. Leading the charge among constituent stocks were Li Auto, Weibo, Ctrip Group, NetEase, and Tongcheng Travel, all recording gains of more than 1%.
Huatai Securities has attributed the recent surge in Hong Kong stocks to the absence of southbound funds last week and the RMB’s appreciation, pointing to foreign capital as the main driver behind the rise. The dovish stance of the Federal Reserve at the May FOMC meeting, coupled with lower-than-expected economic and employment data, has encouraged investors to move towards a more risk-on approach.
Furthermore, positive domestic policy developments have also boosted foreign investors’ confidence in the domestic economic recovery. While real estate and domestic demand policies have been supportive, concerns remain regarding the quality of the recovery, particularly in the real estate sector.
Overall, foreign capital inflows have been on the rise, with expectations for improvement in domestic fundamentals growing. The Hang Seng Index’s short-selling ratio has dropped, indicating a strong motivation for closing positions, while allocation-type foreign capital has shown a marginal inflow tendency.
As Hong Kong stocks continue to rally, investors are advised to proceed with caution and conduct thorough research before making any investment decisions.
Source: Jiemian News