Hong Kong Stock Market Indicator | Hang Seng Index Continues to Rise with Increased Volume, Accelerating Decline; Ongoing Conflicts May Restart Recession Trading

On March 20, the Financial Association reported (Editor: Feng Yi) that today, the three major indices of the Hong Kong stock market opened lower and continued to decline, accelerating downwards in the afternoon. By the close, the Hang Seng Tech Index fell by 2.48%. The Hang Seng Index and the National Enterprises Index dropped by 0.88% and 1.4%, respectively.

【Tech stocks face pressure again; Hang Seng Index continues to decline with increased volume】

On the market, major tech stocks were clearly under pressure today. Xiaomi dropped nearly 9%, Alibaba fell over 6% after its earnings report, and JD.com, Baidu, Tencent, and Meituan all declined.

In other sectors, the AI sector saw a correction, with software and semiconductor stocks following suit. Additionally, industries such as military, film and television, machinery, shipping, real estate, and catering all experienced declines.

Among the sectors that rose, photovoltaic and other new energy sectors strengthened against the trend, while the enthusiasm for lithium batteries and energy storage concepts warmed up. Changes in the situation in the Middle East continued to drive oil and gas stocks upward.

Overall, the Hang Seng Index sharply corrected after reaching the resistance level of 26,000 points.

Today, the total turnover of the Hang Seng Index was HKD 342.518 billion, with continuous capital outflow, indicating a clear willingness to flee the market.

In terms of short selling, the total short selling amount today was HKD 44.101 billion, equivalent to 12.88% of the Hang Seng Index turnover.

Xiaomi Group-W, Alibaba-W, and Tencent Holdings had the highest short selling amounts, at HKD 4.249 billion, HKD 3.72 billion, and HKD 1.915 billion, respectively.

【Popular sectors see more declines than gains; ongoing conflict may restart recession trades】

In terms of market trends, today saw more declines than gains in major popular sectors. After consecutive increases, the AI sector experienced a short-term correction, while energy stocks strengthened again, with existing funds increasingly leaning toward risk aversion.

In the short term, the market’s expectations of a recession triggered by high energy prices are continuing to rise.

According to a media survey of economists, with the conflict in the Middle East entering its third week, the probability of the U.S. economy falling into recession in the next 12 months is now 32%, slightly higher than the 27% predicted in January. Saudi sources predict that if the conflict continues until the end of April, international oil prices could exceed $180 per barrel.

It should be noted that during the previous escalation of the conflict in the Middle East, most investors in global stock markets remained calm. However, there are signs that this confidence is beginning to wane.

But according to Goldman Sachs’ trading department, those clients who previously expected the war in Iran to end quickly have begun to have doubts.

In terms of market performance, the U.S. S&P 500 index has fallen below its 200-day moving average and touched a four-month low. The European Stoxx 600 index fell 2.4% on Thursday, also reaching a three-month low.

【A-shares briefly lose the 4000-point mark; institutions focus on risk-averse strategies】

Additionally, today the Shanghai Composite Index fluctuated and adjusted, falling below its six-month line and breaking the 4000-point milestone. The total turnover of the Shanghai and Shenzhen stock markets was CNY 2.29 trillion, an increase of CNY 175.9 billion compared to the previous trading day. On the market, over 4,700 stocks fell for two consecutive days, with short sellers gradually dominating the short-term trend.

Looking ahead, Galaxy Securities believes that the U.S.-Iran conflict has reshaped the industry landscape of the Hong Kong stock market mainly through inflation expectations and risk aversion.

First, the energy sector has become the only consensus among foreign and domestic investors. In terms of risk aversion, this is mainly reflected in the shift of funds from cyclical stocks to defensive stocks.

The institution pointed out that the resilience of the Hong Kong stock market comes from being in a valuation trough, which has attracted risk-averse funds seeking certainty. Looking ahead to the next six months, discretionary consumption is currently the sector in the Hong Kong stock market with the strongest performance growth and profitability, while the financial sector has ample safety margins.