On October 7, the Hong Kong stock market rose sharply again.
According to Wind data, the Hang Seng Index closed up 1.60% at 23,000 points; The Hang Seng Tech Index closed up more than 3%. The semiconductor and semiconductor production equipment sector and the diversified financial sector closed up 14.85% and 12.33% respectively, leading the Hong Kong stock market.
The A-share market opens tomorrow, and the two major market characteristics of Hong Kong stocks on the afternoon of October 7 are worth paying attention to: First, the "Zhongzitou" stocks have risen significantly, as of the close, SMIC rose nearly 22%, CITIC shares rose nearly 13%, and Chinese Life rose more than 12%; Second, H-shares containing A-shares performed actively, causing the Hang Seng Stock Connect AH Share Premium Index to accelerate downward in the afternoon, falling below the 130-point mark.
The Hang Seng Index closed above 23,000 points
On October 7, the Hong Kong stock market continued to fluctuate at a high level after short-term fluctuations at the beginning of the session. According to Wind data, as of the close of the day, the Hang Seng Index, the Hang Seng China Enterprises Index, and the Hang Seng Technology Index rose 1.60%, 2.14%, and 3.05% respectively.
Since October 2, the Hang Seng Index has risen by 9.30%; Since September 12, the Hang Seng Index has risen by 35.02%. At present, the Hang Seng Index stands above 23,000 points, a new high since February 2022.
On October 7, the semiconductor and semiconductor production equipment sectors and the diversified financial sector joined hands to lead the Hong Kong stock market, with the two sectors closing up 14.85% and 12.33% respectively.
It is worth noting that on the afternoon of October 7, the "Zhongzitou" stocks in the Hong Kong stock market collectively rose. As of the close, SMIC rose nearly 22%, CITIC shares rose nearly 13%, Chinese Life rose more than 12%, and China Unicom and China Pacific rose more than 8%.
H-shares in the Hong Kong stock market, including A-shares, were active on the afternoon of October 7. As of the close, Hongye Futures rose by more than 58%, Zhejiang Shibao rose by more than 44%, and Shenwan Hongyuan rose by nearly 41%.
AH premiums narrowed
According to Wind data, as of the close of trading on October 7, the Hang Seng Stock Connect AH Premium Index fell 3.85% to 128.49 points, and since October 2, the index has fallen 13.39%.
Wind data shows that there are 151 H-shares in the Hong Kong stock market containing A-shares, and most of the top gainers in the past 5 days are Chinese-funded brokerage stocks, and some semiconductor stocks and pharmaceutical stocks also performed well.
Judging from the list of gainers in the past 5 days, the H shares of China Merchants Securities and Hongye Futures have risen by more than 200% in the past 5 days, and the H shares of Zhongzhou Securities, Shenwan Hongyuan, China Securities Construction Investment Securities, Guolian Securities, Orient Securities, Shanghai Fudan, Fudan Zhangjiang and Everbright Securities have risen by more than 100% in the past 5 days.
Analysts said that the decline in the Hang Seng Stock Connect AH premium index means that the price of H-shares will rise, and the corresponding A-shares will be more attractive. The better performance of H-shares will have a positive impact on A-shares, which share common fundamentals.
Shenwan Hongyuan said that from the perspective of the price comparison between Hong Kong stocks and A-shares, the rising progress of Hong Kong stocks has been ahead of A-shares. Hong Kong stocks rose during the National Day holiday, although there is a "capital does not take a vacation", and the impact of long forces concentrated on Hong Kong stocks. However, the strength of Hong Kong stocks at least proves that foreign capital is optimistic, and the long forces are still exerting force. After the holiday, A-shares may rise in a concentrated manner to repair the price comparison relationship.
Valuation repair is expected to continue
Looking forward to the future of Hong Kong stocks, CITIC Securities said in a research report on October 7 that despite a round of rapid rise, the current valuation level of Hong Kong stocks is still in a relatively cost-effective position compared with the global market and historical conditions, especially the current valuation of the growth and large financial sectors is at a low historical quantile. Although the fastest stage of the rally driven by the short squeeze trade may have passed, in the context of the gradual implementation of the policy and the "excitement" of investor sentiment, it is difficult to say that Hong Kong stocks have peaked in stages, and their valuation repair is expected to continue until early November.
CITIC Securities also cautioned that it is necessary to be vigilant against the potential disruption to the Hong Kong stock market caused by the linkage effect of the Hong Kong and US stock markets during the United States election cycle.
In terms of industry allocation, CITIC Securities recommends paying attention to two main lines: first, the non-bank financial sector that benefits from monetary easing, real estate and the continuous implementation of policies to boost the capital market; Second, the valuation repair is expected to continue in consumer and technology-related industries, including the Internet, biotechnology, and consumer electronics.
(The picture in the article is from Wind)