①The Hang Seng Index experienced a ‘precipitous’ reduction in trading volume while undergoing adjustments. What new moves are the short sellers making? ②Institutional analysts claim that the 25,000-point level is critical to defend in the short term. What market variables should be monitored going forward?
Cailian Press, March 26 (Editor: Feng Yi) Today, Hong Kong stocks fell into another round of adjustments, with the three major indices opening low and continuing lower. By the close, the Hang Seng Tech Index plummeted by 3.28%, while the Hang Seng Index and the Hang Seng China Enterprises Index dropped by 1.89% and 2.25%, respectively.
[Weak Earnings in Tech Stocks Lead the Decline; The Hang Seng Index Undergoes a ‘Precipitous’ Reduction in Trading Volume During Adjustments]
On the sector front, tech stocks retreated due to poor earnings results, with Kuaishou plunging 14% post-earnings, marking the worst performance. Alibaba, Meituan, Baidu, and Tencent also declined.
Elsewhere, the broader financial sector weakened across the board, with insurance stocks suffering significant losses, while banking and brokerage shares followed suit. Additionally, short-term hot sectors such as gold, semiconductors, and lithium batteries also saw deep pullbacks.
Among rising sectors, those benefiting from geopolitical tensions and high oil prices bucked the trend, with oil and gas as well as coal stocks leading the gains.
Overall, after a brief rebound, Hong Kong stocks remain under bearish pressure. The Hang Seng Index recorded a total turnover of only HKD 261.662 billion for the day, nearly HKD 90 billion less than the previous day, reflecting weak off-market buying interest.
On the short-selling side, the total short-selling amount reached HKD 42.916 billion today, accounting for 16.40% of the Hang Seng Index’s turnover, indicating continued short-term bearish pressure.
Pop Mart, Meituan-W, and Xiaomi Group-W ranked among the top three in short-selling amounts at HKD 4.065 billion, HKD 3.351 billion, and HKD 2.54 billion, respectively.
[Geopolitical Tensions Reassert Market Expectations; Broad-Based Sector Declines]
In terms of market performance, major sectors generally declined today. Sectors benefiting from geopolitical conflicts, such as oil and gas and coal, once again showed strong resilience against the trend.
In the short term, the situation in the Middle East continues to dominate the trend of Hong Kong stocks, especially given the uncertain prospects of US-Iran negotiations, leading to fluctuating market expectations.
According to reports, the US Department of Defense is reportedly developing a so-called ‘final blow’ military option targeting Iran, which may include the deployment of ground troops and large-scale airstrikes. Some analysts suggest that if diplomatic negotiations fail to make progress, the likelihood of an escalation in tensions will further increase.
As of the time of writing, during European and American trading sessions, the daily gains of international crude oil futures expanded. WTI crude oil rose 4.47%, trading at $94.358 per barrel, while Brent crude oil increased by 4.76%, reaching $101.886 per barrel.
On the other hand, this week, after several leading technology and new consumer concept companies announced their earnings, they experienced significant adjustments, reflecting market concerns about pressure on financial results. The associated individual stock risks are worth noting.
[A-share trading volume falls below 2 trillion yuan; institutions say Hang Seng Index must defend 25,000 points]
Moreover, A-shares also underwent another round of volatile adjustments today. Most notably, the combined trading volume of the Shanghai and Shenzhen markets fell below the 2 trillion yuan mark for the first time in six weeks, setting a record for the lowest trading volume this year. Compared with the previous trading day, there was a reduction of 236.2 billion yuan in volume, with weak rotation among market hotspots and more than 4,400 stocks declining across the entire market.
Looking ahead, CCB International stated that the market has overreacted in the short term to the risk of stagflation and aggressive Fed pricing. At present, the threshold for interest rate hikes remains high. The 25,000-point level remains a crucial watershed for the current bull-bear cycle in Hong Kong stocks. If the Hang Seng Index can stabilize above this level, Hong Kong stocks still have the potential for further upward movement. The next month will be a critical observation window.
