[ET Net News Agency, 07 July 2026] External US markets performed well, and Hong Kong stocks panted this morning after three consecutive days of gains. The HSI opened lower but reversed upwards, reaching a high of 23,820 points. Profit-taking emerged after touching the 20-day moving average (around 23,794), and the index later reversed downwards again. It closed down 98 points, or 0.4%, at 23,517 at midday, with main board turnover exceeding HKD 187 billion, while southbound capital continued to see a net inflow of HKD 3 billion. The Hang Seng China Enterprises Index stood at 7,779, down 33 points or 0.4%. The Hang Seng Tech Index stood at 4,528, down 12 points or 0.3%.
"Nip Chun Pong: HSI is expected to challenge 24,000 points this week"
The HSI showed slight signs of improvement this week, exhibiting a slow recovery. Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the HSI's performance in June worsened significantly, recording a drop of over 2,300 points in a single month and even testing a one-year low. This was mainly due to the sell-off of large-scale tech stocks among the HSI constituents, coupled with Mainland China tightening offshore investment arrangements, emphasizing that they must comply with laws and regulations. Additionally, the deadline for Mainland China residents' annual individual income tax settlement is from March to the end of June, restricting capital outflow, which also dragged down Hong Kong stocks' performance in June. However, Nip Chun Pong pointed out that the market has basically digested the aforementioned negative factors, so it is reasonable for Hong Kong stocks to welcome a rebound in July. Given the sharp drop of 2,300 points in June, he predicts that technically, the HSI can be expected to rebound by at least half of the decline, which is about 1,000 points.
Nip Chun Pong analysed that capital mostly chased semiconductor shares earlier, but the investment enthusiasm for the relevant sector has now cooled down. Investors are turning to shares with attractive valuations, which is expected to drive traditional tech stocks to regain their upward momentum, thereby benefiting the HSI.
Furthermore, Morgan Stanley previously predicted that the Federal Reserve would maintain interest rates unchanged this year. Nip Chun Pong believes that the news has limited impact on Hong Kong stocks. He explained that because the performance of Hong Kong stocks significantly lags behind US stocks, whether interest rates remain unchanged or are hiked, the downward pressure exerted on Hong Kong stocks is quite limited.
Regarding the short-term trend of the HSI, Nip Chun Pong believes that the HSI is expected to challenge the 24,000-point mark this week. If it can stand firm, the July target can look up to 24,500 points, or even 24,800 points. As to whether the HSI can sustain its upward trend in the second half of the year, he admitted to having aspirations, but given that the resistance at the January high is extremely large, analysing based on current market conditions, the possibility of Hong Kong stocks hitting new highs within the year is not high. If it can recover to 27,000 points before the end of the year, the performance would already be quite decent.
"Tencent reduces Kuaishou stake but holds back a card, showing confidence"
The market welcomed another focal piece of news today. Kuaishou (01024) has been informed that Tencent (00700) sold approximately 273 million Class B shares through off-market block trades yesterday. Nip Chun Pong believes that this move by Tencent is one of its strategic deployments to prepare for its future resource investment in AI. He noted that Tencent has always held shares in various tech enterprises and has reduced its stakes one after another in recent years. However, unlike the previous disguised complete divestments of JD.com (09618) and Meituan (03690) via physical distribution, Tencent this time only reduced its stake in Kuaishou to about 10%, a reduction of less than half. This reflects that Tencent remains optimistic about Kuaishou's business prospects; this cashing out is purely for resource reallocation and is not a bearish view on Kuaishou's future.
Nip Chun Pong expects that Tencent's stake reduction this time will not affect the future strategic cooperative relationship between the two parties. He analysed that in terms of traffic generation, games launched by Tencent can be promoted through Kuaishou's live streaming and short video platforms, bringing significant publicity effects; therefore, the two parties are inherently mutually beneficial and win-win. In addition, the market places high expectations on the future revenue performance of Kuaishou's "Kling AI", which in turn gives Kuaishou huge room for valuation reshaping. Nip Chun Pong believes Tencent has also noticed this point, which is why it chose to only moderately reduce its stake rather than fully selling out.
Nip Chun Pong particularly mentioned that Tencent reportedly set a 90-day lock-up period for its remaining holdings, which helps stabilise Kuaishou's future share price performance. It is expected that the market can fully digest this news within this week. On investment strategy, he believes that aggressive investors can consider accumulating Kuaishou at the current price level of around HKD 42. As for investors who worry that the share price may still face selling pressure in the short term, they can wait for the share price to pull back to the HKD 39 to HKD 41 range before making arrangements.
"Nip Chun Pong: HSI is expected to challenge 24,000 points this week"
The HSI showed slight signs of improvement this week, exhibiting a slow recovery. Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the HSI's performance in June worsened significantly, recording a drop of over 2,300 points in a single month and even testing a one-year low. This was mainly due to the sell-off of large-scale tech stocks among the HSI constituents, coupled with Mainland China tightening offshore investment arrangements, emphasizing that they must comply with laws and regulations. Additionally, the deadline for Mainland China residents' annual individual income tax settlement is from March to the end of June, restricting capital outflow, which also dragged down Hong Kong stocks' performance in June. However, Nip Chun Pong pointed out that the market has basically digested the aforementioned negative factors, so it is reasonable for Hong Kong stocks to welcome a rebound in July. Given the sharp drop of 2,300 points in June, he predicts that technically, the HSI can be expected to rebound by at least half of the decline, which is about 1,000 points.
Nip Chun Pong analysed that capital mostly chased semiconductor shares earlier, but the investment enthusiasm for the relevant sector has now cooled down. Investors are turning to shares with attractive valuations, which is expected to drive traditional tech stocks to regain their upward momentum, thereby benefiting the HSI.
Furthermore, Morgan Stanley previously predicted that the Federal Reserve would maintain interest rates unchanged this year. Nip Chun Pong believes that the news has limited impact on Hong Kong stocks. He explained that because the performance of Hong Kong stocks significantly lags behind US stocks, whether interest rates remain unchanged or are hiked, the downward pressure exerted on Hong Kong stocks is quite limited.
Regarding the short-term trend of the HSI, Nip Chun Pong believes that the HSI is expected to challenge the 24,000-point mark this week. If it can stand firm, the July target can look up to 24,500 points, or even 24,800 points. As to whether the HSI can sustain its upward trend in the second half of the year, he admitted to having aspirations, but given that the resistance at the January high is extremely large, analysing based on current market conditions, the possibility of Hong Kong stocks hitting new highs within the year is not high. If it can recover to 27,000 points before the end of the year, the performance would already be quite decent.
"Tencent reduces Kuaishou stake but holds back a card, showing confidence"
The market welcomed another focal piece of news today. Kuaishou (01024) has been informed that Tencent (00700) sold approximately 273 million Class B shares through off-market block trades yesterday. Nip Chun Pong believes that this move by Tencent is one of its strategic deployments to prepare for its future resource investment in AI. He noted that Tencent has always held shares in various tech enterprises and has reduced its stakes one after another in recent years. However, unlike the previous disguised complete divestments of JD.com (09618) and Meituan (03690) via physical distribution, Tencent this time only reduced its stake in Kuaishou to about 10%, a reduction of less than half. This reflects that Tencent remains optimistic about Kuaishou's business prospects; this cashing out is purely for resource reallocation and is not a bearish view on Kuaishou's future.
Nip Chun Pong expects that Tencent's stake reduction this time will not affect the future strategic cooperative relationship between the two parties. He analysed that in terms of traffic generation, games launched by Tencent can be promoted through Kuaishou's live streaming and short video platforms, bringing significant publicity effects; therefore, the two parties are inherently mutually beneficial and win-win. In addition, the market places high expectations on the future revenue performance of Kuaishou's "Kling AI", which in turn gives Kuaishou huge room for valuation reshaping. Nip Chun Pong believes Tencent has also noticed this point, which is why it chose to only moderately reduce its stake rather than fully selling out.
Nip Chun Pong particularly mentioned that Tencent reportedly set a 90-day lock-up period for its remaining holdings, which helps stabilise Kuaishou's future share price performance. It is expected that the market can fully digest this news within this week. On investment strategy, he believes that aggressive investors can consider accumulating Kuaishou at the current price level of around HKD 42. As for investors who worry that the share price may still face selling pressure in the short term, they can wait for the share price to pull back to the HKD 39 to HKD 41 range before making arrangements.
