Hong Kong stock market correction, showing signs of profit-taking
Experience for a month in a rowbaccaratnearmeAfter rising in 2010, Hong Kong stocks showed a significant correction last weekend. Market analysts have repeatedly warned investors that the market has become overbought and sentiment may be overinflated. Hang Seng Index at 19baccaratnearme, the initial goal of the 000 -20,000 point area has been basically achieved. With the promotion of risk appetite and funding, the driving force for this round of rise mainly comes from these factors. When market indicators such as the Relative Strength Index (RSI) and short selling ratios show signs of overbought, market fragmentation and investor profit-taking are not surprising. The Fed's "hawkish" stance and the rebound of major U.S. technology stocks also provide investors with an "excuse" to take profits.
Markets may fluctuate at current levels. If the 10-year Treasury yield falls further to 4%, the Hang Seng Index is expected to challenge the 21,000-point level. The recovery of earnings growth is also a key factor. If profit growth reaches 10% in 2024, the Hang Seng Index may exceed 22,000 points. However, these conditions are unlikely to be achieved in the short term.
Although there are signs that fundamentals are improving, the effectiveness of real estate policies still needs to be observed. Reducing mortgage interest rates and down payment ratios may boost real estate sales in the short term, especially for rigid demand. However, in the context of weak house prices and income expectations, these measures are difficult to fundamentally solve existing problems. Government purchasing and storage may be key, but this requires appropriate purchase discounts and financial support from the central government.
In market fluctuations, investors should focus on structural opportunities. The high-dividend sector may benefit from short-term market fluctuations, potential tax policy adjustments expectations, and concerns about growth and external shocks. The technology hardware and consumer electronics sectors, especially those export-oriented leading companies, as well as tourism and leisure related consumer services sectors, may become important investment options.