Hang Seng Index recovers above 25,000 points; precious metals, consumer, and biotech sectors strengthen | Hong Kong stock market review

Will high shorting trigger a short squeeze?

21st Century Business Herald Reporter Xiaoxia

On March 24, after experiencing a significant decline in the previous trading day, the Hong Kong stock market welcomed a rebound today.

The Hang Seng Index closed at 25,063.71 points, up 2.79%, regaining the 25,000-point threshold, with a total trading volume of HKD 303.073 billion, a decrease from the previous day. The Hang Seng Tech Index also performed well, closing up 2.51% at 4,830.89 points, with a trading volume of approximately HKD 60 billion, also showing a contraction.

In the main board of Hong Kong stocks, 1,301 stocks rose, while 411 stocks fell. Southbound capital saw a significant outflow of HKD 27.361 billion.

By sector, in the Wind Hong Kong tertiary industry index, precious metals and consumer sectors led the rise, with Life Sciences Tools and Services III (+8.77%), Precious Metals (+7.01%), and Leisure Goods III (+6.89%) being the top three sectors for gains; traditional energy and cyclical sectors were under pressure, with Coal III (-2.30%), Electrical Equipment III (-1.52%), and Oil & Gas (-1.33%) being the bottom three sectors for losses.

In the biopharmaceutical sector, leading stocks included WuXi AppTec (2359.HK, +10.61%), Kanglongda (3759.HK, +4.25%), and Aoxing Biopharmaceutical (6118.HK, +7.46%).

In the precious metals sector, Jiaxin International Resources (3858.HK) surged 14.43%, Chifeng Jilong Gold Mining (6693.HK) soared 12.94%, and Lingbao Gold (3330.HK) rose 9.95%.

In the consumer sector represented by leisure goods, Pop Mart (9992.HK), as the leading stock in the sector, rose 7.42%, with a trading volume of HKD 4.353 billion, becoming the market focus. Blukoo (0325.HK) rose 4.86%, and Tongyuan International (3830.HK) rose 5.71%.

The energy sector continued its weakness from yesterday. Feishang Non-Coking Coal (1738.HK) fell 6.50%, Nanshan Resources (1229.HK) declined 5.98%, and MI Energy (1555.HK) dropped 11.36%.

Additionally, the Foxconn Index surged 8.83%, becoming the largest rising concept sector of the day, with leading stocks in the sector collectively moving upward.

In terms of individual stocks, blue-chip stocks generally rose, with financial and consumer sectors performing prominently. HSBC Holdings (0005.HK) rose 3.95%, and AIA Group (1299.HK) rose 7.25%. In the consumer sector, China Resources Beer (0291.HK) rose 8.24%, and Pop Mart (9992.HK) rose 7.42%. Resource blue chips also performed strongly, with Zijin Mining (2899.HK) rising 7.20% and Zhaojin Mining (1818.HK) rising 7.50%. The most active stocks in the stock connect were also mainly concentrated in the aforementioned consumer, financial, and resource sectors.

On the news front, Chow Tai Fook announced a delay in the price adjustment of its “fixed-price” products, with stores ready with new price tags pending notification; Lao Pu Gold plans to expand new stores in Hong Kong, Macau, and Asia, with the company’s stock price soaring 16.11% today, with a trading volume of HKD 2.722 billion; Alibaba Cloud and Siemens expanded their cooperation to deploy cloud-based CAE solutions.

According to CCTV International News, on March 23 local time, Trump stated that the U.S. and Iran had very good and productive talks, but Iran subsequently denied this claim. On March 24, an advisor to the Supreme Leader of Iran reiterated the conditions for ending the war, stating that Iran would only stop the war when it receives all compensation, all economic sanctions are lifted, and international legal assurances are obtained to prevent U.S. interference in Iranian affairs.

Looking ahead to the Hong Kong stock market, Guangfa Securities stated on March 22 that there has been significant internal differentiation in Hong Kong stocks from the end of last year to now, with high dividends reflecting the pricing power of Chinese companies, supported by southbound funds; the tech sector is dominated by foreign capital and is sensitive to performance expectations and overseas liquidity, leading to a deeper decline in the tech sector. Currently, the short selling volume accounts for about 12%, similar to the bear market in Hong Kong stocks in 2021-2022, reaching historical highs, with limited further upward space. High short selling does not necessarily indicate a market decline, but if the market warms up, it may trigger a short squeeze that amplifies the rebound. Late March may see a complete sell-off of negative news; if market sentiment improves, attention can be paid to the Hang Seng Tech and Hong Kong Stock Connect Internet.

Huatai Securities suggested on March 22 to maintain a low position in Hong Kong stocks, with short-term recommendations focusing on power operators, oil and gas leaders, and coal-electricity joint ventures; mid-term focus on semiconductor hardware and power equipment that can go overseas for accumulation at low prices; dividends (especially for local Hong Kong stocks) remain a key part of the base.

Data source: Wind

(Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk based on this.)