Hong Kong stocks rebound after hitting the bottom, and the Hang Seng ETF Huaxia (159920) continued to narrow its decline at midday.

On March 30, the three major Hang Seng stock indexes all adjusted lower in the morning session. By midday, the Hang Seng Index was down 0.93%, closing at 24,719.20 points; the Technology Index was down 1.70%, at 4,696.96 points; and the China Enterprises Index was down 0.74%, at 8,391.09 points. Among popular ETFs, the Hang Seng ETF Huaxia (159920) continued to narrow its decline, now down more than 1%; the Hang Seng China Enterprises ETF Huaxia (159850) was down nearly 1%; and the Hang Seng Tech ETF Huaxia (513180) fell more than 2.5% by midday.

Analyst Huatai Securities said that the core variable driving the market decision right now—the question of whether the Strait of Hormuz will remain open to navigation—still has no clear certainty. In terms of allocation, aside from energy, new energy, and the power chain, which the market has broadly already formed a consensus on and still holds positions, the firm suggests that investors can rebalance their positions along the lines of further balancing internal and external demand: for the external-demand portion, reduce allocation to sectors with relatively larger exposure to discretionary consumption in external markets, especially Europe and Asian markets; maintain allocation to sectors whose external demand does not fall but instead rises, mainly midstream manufacturing with China’s industrial strengths and the broader energy chain. For the internal-demand portion, it previously had lower crowding but may be more resilient than external demand. In recent times, the marginal improvement in high-frequency real estate data, after the earnings season ended, profit downgrades and the clearing of positions (chips) are all coming into place. Investors can moderately increase exposure to Alpha opportunities in essential consumption and service consumption, as well as internet consumption sectors seeing improving pressure. Hong Kong local stocks remain a value-for-money core holding.

Worth watching:

Hang Seng core broad-based ETF: Hang Seng ETF Huaxia (159920)

AI+ platform economy: Hang Seng Tech ETF Huaxia (513180)

Catching Hang Seng consumer core assets: Hang Seng Stock Connect Consumer ETF Huaxia (513230)

Representative of the global pharmaceutical full industry chain: Hang Seng Pharma ETF Huaxia (159892)

Pooling China’s AI technology concept companies: Hang Seng Internet ETF Huaxia (513330)

Daily Economic News