Hang Seng Index Falls 1.29%
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The Hang Seng Index(HSI) fell 1.29% this week, while the Hang Seng TECH Index(HSTECH) underperformed with a decline of 1.94%. The Hong Kong stock market experienced intense volatility throughout the week, primarily driven by the fluctuating geopolitical situation in the Middle East and the resulting fluctuations in global macro expectations. Although the trading volume of the Hang Seng Index on the last day shrank by 5.52% compared to the 50-day average, indicating cautious trading sentiment, the continuous inflow of southbound capital provided key support for the market.
The trend of Hong Kong stocks is highly correlated with the global macro environment. Initial jobless claims in the US for the week ending March 21 remained flat at 210,000, indicating resilience in the labor market. However, the conflict in the Middle East has led to continued tension in energy supplies. US EIA crude oil inventories have surged for two consecutive weeks (reaching 6.926 million barrels this week), reflecting a combination of weak refinery demand and supply shocks, exacerbating “stagflation” concerns. Against this backdrop, although the Federal Reserve maintained interest rates at 3.75%, its dot plot significantly lowered rate cut expectations, implying only one rate cut in 2026. This has led to a surge in US Treasury yields and a stronger US dollar, putting pressure on global risk assets. As an offshore market, Hong Kong stocks are extremely sensitive to liquidity changes. However, China’s domestic policy front continues to release positive signals. The central bank has conducted increased MLF operations for 13 consecutive months, firmly maintaining stable market operations and effectively hedging against some external shocks.
In terms of sector performance, the market style presents a pattern of coexistence between defense and high prosperity. Benefiting from strong new energy vehicle exports and the catalyst of Xiaomi Auto’s first profit, Geely Auto(00175) rose 7.07% for the week. Its EPS Rating is as high as 97, demonstrating excellent earnings growth capability. High-dividend sectors such as finance and utilities also attracted capital. CITIC BANK(00998) rose 6.51% with a price-to-book ratio of only 0.55; CGN POWER(01816) rose 5.56%, with an industry ranking of 35, placing it in a relatively strong range. In contrast, consumer technology stocks with large gains in the early stage, such as Kuaishou, saw significant pullbacks due to pressure on performance and sentiment.
The US stock market showed significant divergence this week, reflecting complex sentiments intertwined with geopolitics and corporate fundamentals. The Dow Jones Indus Actual(0DJIA) bucked the trend to rise 0.84%, while the S & P 500 Index(0S&P5) and Nasdaq Composite(0NDQC) fell by 0.45% and 1.11% respectively.
The core of market volatility stems from the repeated twists and turns in the US-Iran ceasefire negotiations. Early in the week, Trump’s statement to delay strikes on Iranian energy facilities boosted the market, but subsequent stalemate in negotiations, coupled with Meta’s loss in a social media addiction lawsuit and heavy fines, led to a sell-off in tech stocks before the weekend. The Federal Reserve’s hawkish stance further suppressed the market; it acknowledged rising inflation pressure and compressed 2026 rate cut expectations to less than once. In addition, news that US federal debt is approaching $40 trillion has also triggered concerns about long-term fiscal sustainability. In this environment, capital has flowed from high-valuation tech stocks to more defensive value sectors.
The A-share market pulled back 1.41% this week. The CSI 300(000300) saw trading volume on the last day shrink significantly by 30.1% compared to the 50-day average, indicating that some capital chose to wait and see under external shocks.
The adjustment was mainly caused by the decline in global risk appetite triggered by the Middle East situation. However, the internal structure of the market remains healthy, and policy support signals are clear. On March 25, the central bank conducted a 500 billion CNY MLF operation, marking the 13th consecutive month of increased rollovers, highlighting the “moderately loose” monetary policy stance. At the same time, the state is accelerating the construction of long-term systems, such as issuing the “Implementation Plan for Accelerating the Establishment of a Long-term Care Insurance System” and releasing embodied AI industry standards, paving the way for the development of new quality productive forces. Against this backdrop, the hard tech sector (military industry, computing hardware, commercial aerospace) has shown strong resilience, while the oil and gas sector, affected by temporary domestic refined oil price controls, is relatively weak.
The Top 33 portfolio fell 0.85% this week (14 up, 19 down), performing slightly better than the Hang Seng Index (HSI). The leading gainer was Geely Auto(00175), with a weekly gain of 7.07%. The Model Portfolio performed weakly, falling an average of 5.74%. Among them, CATL(03750) fell 9.17% for the week due to the decline in overall market risk appetite. Since its inception, HK33 has demonstrated relative resilience in volatile market conditions due to its screening logic of high industry strength and quality fundamentals.
From a technical perspective, the current price of the Hang Seng Index(HSI) has fallen below the 50-day moving average (-5.2059%) and the 200-day moving average (-3.0147%). The medium-term trend is weak, entering a phase of range-bound consolidation. The short-term key support level is near 24,500 points. If it holds, the market may have a technical rebound opportunity; the upside resistance is at 25,500 points. The technical pattern of the Hang Seng TECH Index(HSTECH) is weaker, with the current price 9.8273% lower than the 50-day moving average and far below the 200-day moving average (-14.6649%), indicating that its rebound lacks sustained momentum and it remains in a downward channel.
Southbound capital was determined this week, with a total net inflow of 25.147 billion HKD for the week. This large-scale inflow occurred against the backdrop of significant market volatility due to external shocks. Especially on March 23, when the Hang Seng Index plunged 3.54%, a single-day dip buying of 29.7 billion HKD was recorded, the second highest level this year. Subsequently, on the 26th when the market fell sharply again, it still saw a net buy of 3.3 billion HKD against the trend. This “buying the more it falls” pattern clearly indicates that mainland investors view the current market pullback as a strategic opportunity to allocate high-quality assets, providing solid bottom support for the Hong Kong stock market.
Overall, the global market this week operated under the dual influence of Middle East geopolitical games and the Federal Reserve’s hawkish stance, with risk assets generally under pressure. Hong Kong stocks experienced intense volatility under external pressure, but the firm inflow of southbound capital highlights its strategic allocation value as a valuation depression. Although A-shares saw a pullback due to spillover effects, solid policy support and active domestic capital provided resilience. The US stock market saw increased divergence due to negative events involving tech giants and cooling rate cut expectations. Looking ahead, market trends will highly depend on the substantive progress of US-Iran ceasefire negotiations and potential easing signals from high-level China-US interactions (such as Trump’s visit to China in May). The market involves risks; investment requires caution.
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published on March 27, 2026