[ET Net News Agency, 09 July 2026] After the sharp rise on the previous day (8 July), Hong Kong stocks opened lower this morning. During the session, heavyweight tech stock Alibaba (09988) gained momentum and rose another 5%, driving the HSI to reverse earlier losses and jump over 100 points, reaching a more than half-month high of 24,353. However, as Mainland China's CPI inflation data was again worse than expected, sparking worries that insufficient domestic demand would affect the domestic economy, Alibaba's gains narrowed significantly and consumer stocks were also sold off. This dragged Hong Kong stocks into negative territory, with the HSI closing the half-day session at 24,011, down 188 points or 0.8%, still holding above the 24,000 mark. The Hang Seng China Enterprises Index stood at 8,011, down 72 points or 0.9%. The Hang Seng Tech Index was at 4,728, down 3 points or less than 0.1%. Notably, turnover remained robust, with the Main Board recording nearly HKD 204.1 billion, and southbound capital seeing a net inflow of 10 billion.
"Jaseper Tsang: Most pessimistic outlook points down to 21,000"
After surging 702 points yesterday to break through the 20-day moving average (currently around 23,742), Hong Kong stocks fluctuated downwards in the early session today and are currently hovering around 24,050 points. The market is waiting to see if the overall market can firmly hold the 24,000 major psychological barrier. Coincidentally, Mainland China's June CPI inflation data released today missed expectations, with deflationary risks intensifying, dragging down the rebound momentum of Hong Kong stocks. Jaseper Tsang, Vice-Chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators Limited, told ET Net News Agency that the recent rally in Hong Kong stocks is merely a technical rebound after being oversold, and the macroeconomic fundamentals have not changed. He pointed out that both the economy of Mainland China and its outlook for the second half of the year are showing signs of weakening, and the property market is also showing fatigue. The current inflation performance further reflects a domestic demand dilemma of "cheap goods competing for poor people". As numerous industries are trapped in oversupply and vicious "involution", it is expected to pose significant resistance to the subsequent rebound momentum of Hong Kong stocks. He continued that the HSI has not yet technically reversed its fluctuating and weak trend, and the deep involvement of various industries in vicious "involution" has also led to a contraction in the core "cash-generating businesses" of listed companies, which is bound to drag down future earnings performance.
On the other hand, the willingness of southbound funds to buy the dips is extremely strong. Looking at yesterday alone, southbound capital recorded a large net inflow of 14.194 billion, pushing the cumulative net inflow for this month to soar to 37.83 billion within just a few days, a month-on-month increase of nearly 40%, and hitting a new high since April, while another inflow of over 10 billion was recorded this morning. However, Jaseper Tsang believes that the massive inflow of southbound capital is only because the HSI and traditional tech stocks had fallen too deeply previously. Relevant buying orders are generally aimed at positioning for a technical rebound on dips, or for short-term speculation using derivatives. Under the current fundamentals, it remains difficult to attract patient long-term foreign capital into the market at the current level.
In addition, Jaseper Tsang expects the Federal Reserve to ease inflationary pressure through balance sheet reduction. Affected by this, some institutional investors have recently been seen adopting profit-taking strategies in the US stock market and even the Asia-Pacific stock markets, thereby exerting pressure on market liquidity.
Regarding the future outlook for the HSI, Jaseper Tsang is not very optimistic about the economic prospects of Mainland China. He expects blue-chip earnings to face downward revision pressure, and the overall market will fail to break free from the overall downward trend. After the rebound, it is expected to test lower levels again, looking down towards the key support level of 21,000 points, which represents a 10-times price-to-earnings (P/E) ratio, in the short term. However, if the situation is more optimistic, on the premise that the external environment turns favourable, global economic correction pressure is contained, and foreign capital locks in profits in an orderly manner, the HSI is expected to maintain a seesaw battle within the range of 23,000 points to 24,300 points.
"Experts' top pick to capture cloud service opportunities is one sector"
The market generally believes that a sector rotation is occurring in the overall market, with funds flowing from new tech stocks back into traditional large-scale tech stocks. Among them, Alibaba (09988) has shown a particularly aggressive trend in the past two days. Yesterday, its share price soared over 12% to close at HKD 107.50, becoming the core driving force pushing the market upwards, and its strength continued today, soaring over 5% in the early session to a high of HKD 112.9.
Regarding Alibaba, Jaseper Tsang also maintains a cautious and bearish attitude. He believes that Alibaba's recent strength is merely an oversold rebound, mainly because Alibaba's share price tumbled from a level of around HKD 143 in May to a low of HKD 88.65, accumulating a huge decline. In addition, the market is currently anticipating that AI transmission and computing power costs will be reduced, which is expected to benefit cloud services and large AI model enterprises. Coupled with the company's upcoming release of quarterly results, the market expects its growth might exceed expectations, thus catalysing this wave of short-term funds entering the market to gamble on a rebound.
However, in the medium to long term, these positive factors still need time to be verified, and whether cloud services can truly benefit from the decline in computing power costs remains unknown. Referencing the external US stock market, the performance of some cloud service sectors has actually been less than ideal, reflecting that not all players can benefit from the AI boom. More importantly, Alibaba's core "cash-generating business", Taobao and Tmall Group, is deeply mired in vicious "involution" competition, which, combined with the slowing growth of online consumption in Mainland China, poses heavy pressure on its long-term fundamentals.
Looking ahead, Jaseper Tsang analysed from a technical perspective that Alibaba's upside potential is limited. In the short term, it may benefit from market expectations regarding its quarterly results and cloud business, with the potential to test the 50-day moving average, which is around the HKD 117 level. As for its medium- to long-term performance, he emphasized that only if the Taobao and Tmall business gets back on track and large AI models successfully monetize will its valuation have a chance to be sustained at a 15-times P/E ratio, which is around the HKD 90 level.
For investors who want to capture cloud service opportunities while pursuing stability and competitive advantages, Jaseper Tsang suggests turning to telecom stocks with stronger defensive attributes, with China Telecom (00728) as the top pick. He pointed out that China Telecom possesses the characteristics of being "good for both offence and defence". It is a traditional defensive stock that also features high-yield characteristics, with an expected dividend yield reaching 6.3%, making it suitable for medium- to long-term investment. He suggests accumulating around the HKD 4.5 level, which is close to the current price, and setting a 12-month long-term target price at HKD 6.5.
"Jaseper Tsang: Most pessimistic outlook points down to 21,000"
After surging 702 points yesterday to break through the 20-day moving average (currently around 23,742), Hong Kong stocks fluctuated downwards in the early session today and are currently hovering around 24,050 points. The market is waiting to see if the overall market can firmly hold the 24,000 major psychological barrier. Coincidentally, Mainland China's June CPI inflation data released today missed expectations, with deflationary risks intensifying, dragging down the rebound momentum of Hong Kong stocks. Jaseper Tsang, Vice-Chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators Limited, told ET Net News Agency that the recent rally in Hong Kong stocks is merely a technical rebound after being oversold, and the macroeconomic fundamentals have not changed. He pointed out that both the economy of Mainland China and its outlook for the second half of the year are showing signs of weakening, and the property market is also showing fatigue. The current inflation performance further reflects a domestic demand dilemma of "cheap goods competing for poor people". As numerous industries are trapped in oversupply and vicious "involution", it is expected to pose significant resistance to the subsequent rebound momentum of Hong Kong stocks. He continued that the HSI has not yet technically reversed its fluctuating and weak trend, and the deep involvement of various industries in vicious "involution" has also led to a contraction in the core "cash-generating businesses" of listed companies, which is bound to drag down future earnings performance.
On the other hand, the willingness of southbound funds to buy the dips is extremely strong. Looking at yesterday alone, southbound capital recorded a large net inflow of 14.194 billion, pushing the cumulative net inflow for this month to soar to 37.83 billion within just a few days, a month-on-month increase of nearly 40%, and hitting a new high since April, while another inflow of over 10 billion was recorded this morning. However, Jaseper Tsang believes that the massive inflow of southbound capital is only because the HSI and traditional tech stocks had fallen too deeply previously. Relevant buying orders are generally aimed at positioning for a technical rebound on dips, or for short-term speculation using derivatives. Under the current fundamentals, it remains difficult to attract patient long-term foreign capital into the market at the current level.
In addition, Jaseper Tsang expects the Federal Reserve to ease inflationary pressure through balance sheet reduction. Affected by this, some institutional investors have recently been seen adopting profit-taking strategies in the US stock market and even the Asia-Pacific stock markets, thereby exerting pressure on market liquidity.
Regarding the future outlook for the HSI, Jaseper Tsang is not very optimistic about the economic prospects of Mainland China. He expects blue-chip earnings to face downward revision pressure, and the overall market will fail to break free from the overall downward trend. After the rebound, it is expected to test lower levels again, looking down towards the key support level of 21,000 points, which represents a 10-times price-to-earnings (P/E) ratio, in the short term. However, if the situation is more optimistic, on the premise that the external environment turns favourable, global economic correction pressure is contained, and foreign capital locks in profits in an orderly manner, the HSI is expected to maintain a seesaw battle within the range of 23,000 points to 24,300 points.
"Experts' top pick to capture cloud service opportunities is one sector"
The market generally believes that a sector rotation is occurring in the overall market, with funds flowing from new tech stocks back into traditional large-scale tech stocks. Among them, Alibaba (09988) has shown a particularly aggressive trend in the past two days. Yesterday, its share price soared over 12% to close at HKD 107.50, becoming the core driving force pushing the market upwards, and its strength continued today, soaring over 5% in the early session to a high of HKD 112.9.
Regarding Alibaba, Jaseper Tsang also maintains a cautious and bearish attitude. He believes that Alibaba's recent strength is merely an oversold rebound, mainly because Alibaba's share price tumbled from a level of around HKD 143 in May to a low of HKD 88.65, accumulating a huge decline. In addition, the market is currently anticipating that AI transmission and computing power costs will be reduced, which is expected to benefit cloud services and large AI model enterprises. Coupled with the company's upcoming release of quarterly results, the market expects its growth might exceed expectations, thus catalysing this wave of short-term funds entering the market to gamble on a rebound.
However, in the medium to long term, these positive factors still need time to be verified, and whether cloud services can truly benefit from the decline in computing power costs remains unknown. Referencing the external US stock market, the performance of some cloud service sectors has actually been less than ideal, reflecting that not all players can benefit from the AI boom. More importantly, Alibaba's core "cash-generating business", Taobao and Tmall Group, is deeply mired in vicious "involution" competition, which, combined with the slowing growth of online consumption in Mainland China, poses heavy pressure on its long-term fundamentals.
Looking ahead, Jaseper Tsang analysed from a technical perspective that Alibaba's upside potential is limited. In the short term, it may benefit from market expectations regarding its quarterly results and cloud business, with the potential to test the 50-day moving average, which is around the HKD 117 level. As for its medium- to long-term performance, he emphasized that only if the Taobao and Tmall business gets back on track and large AI models successfully monetize will its valuation have a chance to be sustained at a 15-times P/E ratio, which is around the HKD 90 level.
For investors who want to capture cloud service opportunities while pursuing stability and competitive advantages, Jaseper Tsang suggests turning to telecom stocks with stronger defensive attributes, with China Telecom (00728) as the top pick. He pointed out that China Telecom possesses the characteristics of being "good for both offence and defence". It is a traditional defensive stock that also features high-yield characteristics, with an expected dividend yield reaching 6.3%, making it suitable for medium- to long-term investment. He suggests accumulating around the HKD 4.5 level, which is close to the current price, and setting a 12-month long-term target price at HKD 6.5.
