{Economic Information Daily, 5th} US September non-farm employment added positions below expectations, weakening market expectations for a Fed rate hike this month. Mainland China's National Day holiday has not yet ended, and northbound funds remain absent. After a slightly lower opening, the Hang Seng Index saw its decline widen to over 100 points in early trading. Funds rotated into AI hardware stocks, and with Alibaba (09988) slightly higher, the decline of the Hang Seng Index narrowed. The index regained the 24,000 level in the afternoon, but the trend remained volatile. However, towards the close, the index was pushed back above 24,000 and closed at its highest level of the day, ending at 24,040, up 68 points or 0.3%. Main board turnover dropped to HK$98.1 billion. The Hang Seng China Enterprises Index closed at 8,051, up 21 points or 0.3%. The Hang Seng Tech Index closed at 4,183, up 25 points or 0.6%.
Since mainland A-shares remain on Golden Week holiday until the 8th, today's main board turnover in Hong Kong was only HK$98.1 billion, the lowest daily turnover since June 21, 2023. The last time daily turnover was below HK$100 billion was on September 16, 2024. Given that leading tech stocks remain unstable and heavyweight HSBC (00005) is pressured by rumors of the UK imposing a windfall tax, the Hang Seng Index is expected to continue fluctuating around the 24,000 level.
*Hong Kong dollar fixed deposit rate hike war intensifies, property stocks weaken*
Although US September non-farm employment growth was below expectations and the unemployment rate edged up to 4.2%, reducing market expectations for a Fed rate hike this month, the local Hong Kong dollar fixed deposit rate hike war has continued to escalate, with at least 20 banks raising deposit rates. This is expected to pressure property developers' financing costs, property prices, and property stock performance. New World (00016) fell 0.9% to HK$105; Henderson Land (00012) fell 1.8% to HK$25.5; CK Asset (01113) fell 1.2% to HK$45.36; Kiu Tsui (01997) fell 1.7% to HK$29.46. Additionally, MTR Corporation (00066) was penalized HK$2.25 billion due to delays in high-speed rail construction, closing down 3.4% at HK$30.6.
*NVIDIA shares hit record high, supporting AI hardware stocks*
NVIDIA's stock price rose as much as 3% last Friday (2nd), touching US$237.88, a new historical high, with market capitalization reaching US$5.7 trillion. This boosted Hong Kong AI hardware stocks: Lenovo Group (00992) rose 4.7% to HK$35.92; Hua Hong (01347) rose 4.3% to HK$110; SMIC (00981) rose 1.7% to HK$61.3. Non-blue-chip stocks also gained: Kingboard CCL (01888) rose 11.9% to HK$55.3; Montage Technology (06809) rose 5.2% to HK$304.8; TianShu ZhiXin (09903) rose 3.9% to HK$102.9.
*Air China down nearly 50% from high, consolidation complete may lead to rebound*
Oil prices remain volatile. Although G7 leaders issued a statement to coordinate the release of 100 million barrels of strategic oil reserves through the International Energy Agency (IEA), an action lasting four months, New York crude futures plunged nearly 5% on Friday but narrowed losses at close. Meanwhile, Yemeni forces backed by Saudi Arabia launched a full-scale offensive against Houthi militants, vowing to reclaim all areas under Houthi control, causing oil prices to soften during Asian trading hours. However, the three major airline stocks continued to fall, with Air China (00753) down 1.9% to HK$3.695.
Earlier reports indicated that bookings for international flights during mainland China's National Day Golden Week increased 22.5% year-on-year, and passenger volume is expected to hit a new historical high for the same period. According to Flight Master DAST data, as of September 29, the weighted average price including taxes for domestic economy class tickets during the 2026 National Day holiday (October 1 to 7) was RMB 929.7, up 11.2% from RMB 836.0 in the same period of 2025; the average base fare was RMB 820.2, up 6.0% year-on-year. However, there are reports that domestic flight prices dropped significantly after October 2, likely due to promotions clearing excess capacity added for Golden Week, expected to be a small proportion.
Since the beginning of the year, after the US and Israel attacked Iran, rising oil prices have pressured mainland Chinese airline stocks. Air China's stock price last month fell to HK$3.56, close to a two-year low. Compared with its year-high of HK$7.77, the current price has fallen about 52% from its peak. Recently, the other two major airlines continue to hit new lows, but Air China's stock has shown resilience due to its higher proportion of international passenger traffic. Although the stock fell today, it did not break below last month's low. Although oil prices may remain volatile in the short term, a significant or sustained rise seems unlikely. Air China's stock has halved from its peak and is expected to consolidate around HK$3.5 to HK$3.6. If oil prices stabilize or retreat, it could help drive a rebound, with an upside target of HK$4. (vs)
Since mainland A-shares remain on Golden Week holiday until the 8th, today's main board turnover in Hong Kong was only HK$98.1 billion, the lowest daily turnover since June 21, 2023. The last time daily turnover was below HK$100 billion was on September 16, 2024. Given that leading tech stocks remain unstable and heavyweight HSBC (00005) is pressured by rumors of the UK imposing a windfall tax, the Hang Seng Index is expected to continue fluctuating around the 24,000 level.
*Hong Kong dollar fixed deposit rate hike war intensifies, property stocks weaken*
Although US September non-farm employment growth was below expectations and the unemployment rate edged up to 4.2%, reducing market expectations for a Fed rate hike this month, the local Hong Kong dollar fixed deposit rate hike war has continued to escalate, with at least 20 banks raising deposit rates. This is expected to pressure property developers' financing costs, property prices, and property stock performance. New World (00016) fell 0.9% to HK$105; Henderson Land (00012) fell 1.8% to HK$25.5; CK Asset (01113) fell 1.2% to HK$45.36; Kiu Tsui (01997) fell 1.7% to HK$29.46. Additionally, MTR Corporation (00066) was penalized HK$2.25 billion due to delays in high-speed rail construction, closing down 3.4% at HK$30.6.
*NVIDIA shares hit record high, supporting AI hardware stocks*
NVIDIA's stock price rose as much as 3% last Friday (2nd), touching US$237.88, a new historical high, with market capitalization reaching US$5.7 trillion. This boosted Hong Kong AI hardware stocks: Lenovo Group (00992) rose 4.7% to HK$35.92; Hua Hong (01347) rose 4.3% to HK$110; SMIC (00981) rose 1.7% to HK$61.3. Non-blue-chip stocks also gained: Kingboard CCL (01888) rose 11.9% to HK$55.3; Montage Technology (06809) rose 5.2% to HK$304.8; TianShu ZhiXin (09903) rose 3.9% to HK$102.9.
*Air China down nearly 50% from high, consolidation complete may lead to rebound*
Oil prices remain volatile. Although G7 leaders issued a statement to coordinate the release of 100 million barrels of strategic oil reserves through the International Energy Agency (IEA), an action lasting four months, New York crude futures plunged nearly 5% on Friday but narrowed losses at close. Meanwhile, Yemeni forces backed by Saudi Arabia launched a full-scale offensive against Houthi militants, vowing to reclaim all areas under Houthi control, causing oil prices to soften during Asian trading hours. However, the three major airline stocks continued to fall, with Air China (00753) down 1.9% to HK$3.695.
Earlier reports indicated that bookings for international flights during mainland China's National Day Golden Week increased 22.5% year-on-year, and passenger volume is expected to hit a new historical high for the same period. According to Flight Master DAST data, as of September 29, the weighted average price including taxes for domestic economy class tickets during the 2026 National Day holiday (October 1 to 7) was RMB 929.7, up 11.2% from RMB 836.0 in the same period of 2025; the average base fare was RMB 820.2, up 6.0% year-on-year. However, there are reports that domestic flight prices dropped significantly after October 2, likely due to promotions clearing excess capacity added for Golden Week, expected to be a small proportion.
Since the beginning of the year, after the US and Israel attacked Iran, rising oil prices have pressured mainland Chinese airline stocks. Air China's stock price last month fell to HK$3.56, close to a two-year low. Compared with its year-high of HK$7.77, the current price has fallen about 52% from its peak. Recently, the other two major airlines continue to hit new lows, but Air China's stock has shown resilience due to its higher proportion of international passenger traffic. Although the stock fell today, it did not break below last month's low. Although oil prices may remain volatile in the short term, a significant or sustained rise seems unlikely. Air China's stock has halved from its peak and is expected to consolidate around HK$3.5 to HK$3.6. If oil prices stabilize or retreat, it could help drive a rebound, with an upside target of HK$4. (vs)
