[Hong Kong Stock Analysis] Hang Seng Index rises over 300 points; analysts expect limited short-term rebound strength, and continued capital outflows from Northbound funds will increase pressure on Hong Kong stocks.

Middle East tensions drag down U.S. stocks sharply, while Hong Kong stocks remain relatively stable. The Hang Seng Index opened 37 points higher on Friday, with early gains expanding to over 300 points, and the Tech Index also rose 3%. Independent market analyst Wen Jie stated that recent market volatility is evident. After the Hang Seng Index broke below the “neckline” of 26,300 points earlier, it continued downward, falling about 3,000 points from its high, entering a key support zone around 25,000 to 25,100 points. A short-term rebound is possible, but the rebound is expected to be limited.

Wen Jie said in a video program that before recent geopolitical tensions escalated, Hong Kong stocks had already weakened, mainly due to concerns over the earnings of large tech companies. Therefore, even if the Middle East situation eases, the Hang Seng Index will still find it difficult to return to 27,400 points for now. He pointed out that northbound funds have recently flowed out significantly, breaking market expectations of buying on dips. If northbound capital continues to exit, it will increase pressure on Hong Kong stocks.

He also mentioned that news from the Two Sessions is unlikely to serve as a positive catalyst. The economic growth target has been lowered to 4.5% to 5%, which is pragmatic but also shows a lack of confidence. Market expectations for large-scale stimulus measures have also decreased. Aside from certain sectors, support for the overall stock market is limited. The Hang Seng Index is expected to fluctuate between 24,800 and 25,700 points in the short term. Currently, the market is driven by events, and technical analysis is for reference only. If the Middle East situation worsens or northbound funds continue to flow out, Hong Kong stocks may test new lows. Conversely, if tensions ease or positive news emerges, further rebounds are possible.

Wen Jie stated that tech stocks are unlikely to rebound significantly in the short term but remain optimistic about their long-term prospects. He favors Tencent (00700) and Alibaba (09988), and suggests that long-term investors consider gradually buying Tech Index ETFs to diversify risk. Recently, he has also increased holdings of high-dividend stock ETFs near the 25,000-point level for medium- to long-term deployment.

Financial Hot Talk

Middle East conflict threatens oil supply. Will oil prices break 100? Could this impact the global economy?