Hang Seng Index Up 2.34%
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The Hang Seng Index(HSI) rose 2.34% this week, while the Hang Seng TECH Index(HSTECH) gained 2.37% in tandem. Despite temporary disruptions from external market volatility during the week, the overall trend remained upward with consolidation. Trading activity surged on the final day, with volumes exceeding the 50-day average by 15.47% and 14.01%, respectively—indicating that pre-holiday capital did not retreat but instead actively positioned itself.
The Hong Kong market rebound was primarily driven by improved domestic and external policy environments: U.S. initial jobless claims for the week ending January 10 fell to 198,000, significantly below the expected 215,000, reinforcing expectations of economic resilience. On January 16, the People’s Bank of China (PBOC) unveiled a comprehensive package of monetary and financial support measures, including cutting rediscount and relending rates by 25 basis points, adding RMB 500 billion in targeted relending quotas for agriculture and small businesses, and establishing a dedicated RMB 1 trillion relending facility for private enterprises—sending a clear signal of “maintaining ample liquidity.” Additionally, China’s December CPI held steady at a 2.7% year-over-year increase, with core inflation remaining mild, while PPI continued its recovery, collectively supporting corporate earnings.
For the Hong Kong market, this round of policy measures exhibits distinct structural characteristics. The PBOC not only lowered financing costs for the real economy through reduced rates on structural tools but also precisely allocated RMB 400 billion in relending quotas for technological innovation and industrial upgrading to the “new quality productive forces” sector. This aligns strategically with the Ministry of Industry and Information Technology’s (MIIT) Action Plan for High-Quality Development of Industrial Internet Platforms (2026–2028), which explicitly calls for deep integration of AI across the entire industrial chain and supports the development of “self-deciding, self-executing, and self-evolving intelligent industrial agents”—providing clear industrial guidance and overseas expansion opportunities for mainland-listed tech companies in Hong Kong.
Meanwhile, the Ministry of Finance and the Ministry of Housing and Urban-Rural Development jointly lowered the minimum down payment ratio for commercial property mortgages to 30% and extended the home-swap tax rebate policy for residents through the end of 2027. Coupled with the Financial Regulatory Authority’s directive to “institutionalize the urban real estate financing coordination mechanism,” these measures effectively alleviated credit risk concerns in the property sector, explaining this week’s counter-trend strength in real estate stocks. Chen Yulu, President of Nankai University, emphasized that “promoting stable economic growth and reasonable price recovery should be key considerations in monetary policy,” signaling continued policy balance between growth stabilization and deflation prevention—offering sustained support for HK equity valuation recovery.
From a sector perspective, industries with high O’Neil industry rankings led the gains. WANGUO GOLD GP(03939), ranked #1 in its industry category, surged 27.43% this week, supported by an EPS Rating of 99 and 33.67% year-over-year revenue growth, making it a standout performer among resource stocks. BILIBILI-W(09626), though in an industry ranked only #68, rose 16.38% on strong AI-driven content ecosystem expectations. Real estate stocks also strengthened against the broader trend, reflecting market response to the normalization of real estate financing mechanisms and the reduction of commercial property down payments to 30%.
In the U.S., all three major indices pulled back this week: the Dow Jones Indus Actual(0DJIA) dipped 0.12%, the S & P 500 Index(0S&P5) declined 0.31%, and the Nasdaq Composite(0NDQC) saw the largest drop at 0.73%. Although chip stocks rebounded on Friday after TSMC raised its 2026 capex guidance to $52–56 billion—lifting NVIDIA by over 2%—the week remained constrained by multiple headwinds.
U.S. December CPI held steady at 2.7% YoY, in line with expectations, but sticky core services inflation persists. Combined with November retail sales rising 0.6% MoM—above forecasts—the likelihood of aggressive near-term rate cuts has diminished. More critically, on January 16, the White House announced a 25% tariff on certain imported semiconductor products, directly impacting exporters like NVIDIA that rely heavily on China. Separately, news that Fed Chair Powell is under DOJ criminal investigation—while not destabilizing markets fundamentally—raised concerns about central bank independence and amplified volatility.
Onshore A-shares consolidated at elevated levels this week, with the CSI 300(000300) slipping modestly by 0.57%. Notably, trading volume on the final day surged by +62.26% above the 50-day average, indicating active institutional during the pullback.
After ending a 17-day winning streak, the SSE Index corrected for three consecutive days, yet semiconductor, precious metals, and tourism sectors held firm. Policy support remains robust: beyond the PBOC’s monetary “combo punch,” the CSRC raised the minimum margin requirement for margin trading from 80% to 100% to curb excessive leverage, while the Ministry of Finance extended the home-swap tax rebate through 2027. MIIT further reinforced the “new quality productive forces” theme by promoting AI integration across industrial chains and adding RMB 400 billion in innovation-focused relending capacity.
This week, the HK33 portfolio delivered outstanding performance, rising 4.31% on average, with 23 gainers and 10 decliners—significantly outperforming the benchmark. WANGUO GOLD GP(03939) led with a 27.43% weekly gain, ranking #1 in its industry and boasting an O’Neil Score of 92. Since inception, HK33 has consistently outperformed the Hang Seng Index, underscoring the effectiveness of focusing on high-scoring stocks in strong industries. The ModelPortfolio edged up 0.79%, with CMOC(03993),HANSOH PHARMA(03692), and ZIJIN MINING(02899) gaining 3.88%, 3.37%, and 3.14%, respectively—all featuring EPS Ratings above 95, highlighting the downside resilience of high-quality earnings leaders.
Technically, the HSI is firmly above all key moving averages—0.87% above the 10-day MA and 2.95% above the 50-day MA—forming a bullish short-term alignment. Key support sits at the psychological 26,000 level, with resistance ahead at the prior high of 27,381.84. The HSTECH also trades above both the 10-day (+0.45%) and 20-day (+2.91%) MAs; if it holds above 5,800 with expanding volume, it could challenge the 6,000 psychological barrier.
Southbound capital recorded net inflows of HK$10.36 billion this week—slower than last week’s HK$32.694 billion but maintaining a consistent inflow trend. Key buying focused on platform economy leaders and high-dividend resource stocks, reflecting unchanged long-term allocation logic by mainland investors toward quality assets.
In summary, global markets are diverging amid policy-data interplay: A-shares are consolidating on the back of “15th Five-Year Plan”-driven industrial policy tailwinds; U.S. equities oscillate between AI narratives and tariff risks; and Hong Kong equities demonstrate resilience, supported by southbound flows and easing expectations. As China’s monetary policy toolkit continues to expand and the U.S. inflation path becomes clearer, individual stocks with high EPS Ratings and O’Neil industry rankings within the top 40 are well-positioned to stand out amid volatility.
Investors are advised to remain calm and rational, avoid chasing rallies, and prioritize stocks with earnings beats and solid technical patterns—adopting a disciplined strategy to navigate market fluctuations.
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published on January 16, 2026