The Economic Times Correspondent reported on the 15th that the U.S. released its September Consumer Price Index (CPI) data, showing an increase of 3.7%, higher than the market expectation of 3.6%; core CPI rose by 2.6%, also exceeding market expectations. The inflation figures surpassing forecasts have heightened expectations for interest rate hikes and triggered market fears over the AI financing bubble. Overnight, the three major U.S. stock indices all declined, with the Nasdaq, representing tech stocks, seeing the most significant drop. Asian markets followed suit today, with Japan and South Korea's stock markets plunging by 4.9% and 7.6% respectively. Hong Kong stocks also weakened, particularly the AI sector, which saw the deepest declines. The Hang Seng Index opened 200 points lower and its midday decline widened to 23,955 points, losing the 24,000 level; however, the decline narrowed later in the day, closing at 24,062, down 251 points or 1%. Board turnover reached nearly HK$224.2 billion. The Hang Seng China Enterprises Index closed at 8,103, down 79 points or 1%. The Hang Seng Tech Index closed at 4,060, down 113 points or 2.7%.
U.S. inflation data once again exceeded market expectations. Even core CPI, which excludes energy and food prices, surpassed forecasts, indicating that the overheating of the U.S. economy has spread to other sectors. However, after the news broke, the yield on 10-year U.S. Treasury bonds initially rose but then retreated noticeably as investors bought at higher levels. Although it remains around 5.1%, this reflects the market beginning to absorb the impact of higher-than-expected inflation. Interest rate futures also suggest only about a 30% chance of a 25 basis point rate hike in October. If the downward trend in bond yields continues, Hong Kong's large-cap tech and internet stocks, despite short-term pressure, are expected to see limited pullbacks compared to U.S. stocks with higher AI component weight. Additionally, given that Hong Kong stocks had already weakened significantly earlier and today's pullback still hovers around the 24,000 level, further corrections are unlikely to break previous lows such as around 23,700.
*Financing fears overshadow AI-related stocks, biotech stocks rebound against the trend*
Rising inflation expectations have spread panic over the AI financing bubble, causing AI-related sectors to fall across the board. Lenovo Group (00992) plunged 14.5%, closing at HK$25.98, the largest decline among blue chips for the day; Hua Hong (01347) fell 7.8% to HK$76.55; SMIC (00981) dropped 4% to HK$52.15; MiniMax (00100) declined 12.1% to HK$179.5; Zhipu (02513) fell 10.2% to HK$513.5.
Tech and internet stocks were not spared either. Alibaba (09988) dropped 3.7% to HK$106.4; Tencent (00700) fell 1.3% to HK$417.8; Kuaishou (01024) declined 3.2% to HK$28.58; Meituan (03690) dropped 2.1% to HK$75.45; however, Xiaomi (01810) rose 2.7% against the trend to HK$27.08, marking three consecutive days of gains with a cumulative increase of 10%.
Biotech stocks rebounded: BeiGene (06160) rose 3% to HK$215.6; Zai Lab (09688) gained 2.7% to HK$17.95; Hansoh Pharmaceutical (03692) advanced 2.6% to HK$31.38; China Biopharmaceutical (01177) rose 2% to HK$5.27.
*BYD sets up overseas plants to avoid EU import quotas*
Recently, China and the EU reached an agreement on hybrid vehicles, with the EU planning to limit imports of Chinese hybrid vehicles, setting an initial annual cap of 350,000 units, increasing by 6% annually from the second year. As China and the EU formally reach a preliminary agreement, the outlook for automakers' overseas sales is gradually becoming clearer. At the same time, however, China has reduced export tax rebates for new energy vehicles from 13% to 9%.
Domestic policies may negatively impact the profitability of Chinese new energy vehicle makers. Although BYD (01211) has a relatively high proportion of vehicle exports and is directly affected by the reduced export tax rebates, the company has long planned to set up factories in Europe, transforming from a pure auto exporter into a major European auto producer. Recently, it was reported that BYD intends to significantly expand its local team. Based on current policy information, BYD's localization production strategy helps it avoid Sino-European hybrid vehicle trade restrictions and EU import tariffs, positively impacting its long-term profitability and competitiveness in Europe.
In terms of share price, BYD closed today at HK$72.95, gradually approaching the support level of HK$71.4 set on June 30, making it relatively attractive in price. Investors interested may consider buying at current levels, with the first resistance around the 20-day moving average at approximately HK$76.6, and a stop-loss level around HK$60. However, since the current China-EU agreement is still in its initial stage, it is difficult to rule out future trade disputes, so it is advisable to start with small positions and consider further purchases once the outlook becomes clearer. (am)
U.S. inflation data once again exceeded market expectations. Even core CPI, which excludes energy and food prices, surpassed forecasts, indicating that the overheating of the U.S. economy has spread to other sectors. However, after the news broke, the yield on 10-year U.S. Treasury bonds initially rose but then retreated noticeably as investors bought at higher levels. Although it remains around 5.1%, this reflects the market beginning to absorb the impact of higher-than-expected inflation. Interest rate futures also suggest only about a 30% chance of a 25 basis point rate hike in October. If the downward trend in bond yields continues, Hong Kong's large-cap tech and internet stocks, despite short-term pressure, are expected to see limited pullbacks compared to U.S. stocks with higher AI component weight. Additionally, given that Hong Kong stocks had already weakened significantly earlier and today's pullback still hovers around the 24,000 level, further corrections are unlikely to break previous lows such as around 23,700.
*Financing fears overshadow AI-related stocks, biotech stocks rebound against the trend*
Rising inflation expectations have spread panic over the AI financing bubble, causing AI-related sectors to fall across the board. Lenovo Group (00992) plunged 14.5%, closing at HK$25.98, the largest decline among blue chips for the day; Hua Hong (01347) fell 7.8% to HK$76.55; SMIC (00981) dropped 4% to HK$52.15; MiniMax (00100) declined 12.1% to HK$179.5; Zhipu (02513) fell 10.2% to HK$513.5.
Tech and internet stocks were not spared either. Alibaba (09988) dropped 3.7% to HK$106.4; Tencent (00700) fell 1.3% to HK$417.8; Kuaishou (01024) declined 3.2% to HK$28.58; Meituan (03690) dropped 2.1% to HK$75.45; however, Xiaomi (01810) rose 2.7% against the trend to HK$27.08, marking three consecutive days of gains with a cumulative increase of 10%.
Biotech stocks rebounded: BeiGene (06160) rose 3% to HK$215.6; Zai Lab (09688) gained 2.7% to HK$17.95; Hansoh Pharmaceutical (03692) advanced 2.6% to HK$31.38; China Biopharmaceutical (01177) rose 2% to HK$5.27.
*BYD sets up overseas plants to avoid EU import quotas*
Recently, China and the EU reached an agreement on hybrid vehicles, with the EU planning to limit imports of Chinese hybrid vehicles, setting an initial annual cap of 350,000 units, increasing by 6% annually from the second year. As China and the EU formally reach a preliminary agreement, the outlook for automakers' overseas sales is gradually becoming clearer. At the same time, however, China has reduced export tax rebates for new energy vehicles from 13% to 9%.
Domestic policies may negatively impact the profitability of Chinese new energy vehicle makers. Although BYD (01211) has a relatively high proportion of vehicle exports and is directly affected by the reduced export tax rebates, the company has long planned to set up factories in Europe, transforming from a pure auto exporter into a major European auto producer. Recently, it was reported that BYD intends to significantly expand its local team. Based on current policy information, BYD's localization production strategy helps it avoid Sino-European hybrid vehicle trade restrictions and EU import tariffs, positively impacting its long-term profitability and competitiveness in Europe.
In terms of share price, BYD closed today at HK$72.95, gradually approaching the support level of HK$71.4 set on June 30, making it relatively attractive in price. Investors interested may consider buying at current levels, with the first resistance around the 20-day moving average at approximately HK$76.6, and a stop-loss level around HK$60. However, since the current China-EU agreement is still in its initial stage, it is difficult to rule out future trade disputes, so it is advisable to start with small positions and consider further purchases once the outlook becomes clearer. (am)
