[ET Net News Agency, 02 December 2025] Expectations of a hawkish Bank of Japan rate hike
have rattled global markets, adding fresh pressure to US equities, which extended recent
declines. However, Asia-Pacific markets, including Hong Kong, proved resilient. The Hang
Seng Index rose as much as 231 points early in the session, buoyed by a rally in Alibaba
(09988), but gains were pared as Alibaba reversed and even turned negative. Nonetheless,
the 26,000 level provided solid support, with the HSI ending the morning up 28 points or
0.1% at 26,061. Main board turnover was close to HKD 99 billion. The Hang Seng China
Enterprises Index slipped 1 point, while the Hang Seng Tech Index lost 29 points, or 0.5%.

"Lee Wai Kit: Catalysts could still push HSI to 27,000 this month"

Rising rate hike expectations in Japan triggered a sharp selloff in Japanese equities
and bonds yesterday, sparking volatility across global bond markets and weighing on US
stocks. The HSI opened over 100 points higher, touched an early peak of 26,264, but market
sentiment cooled approaching the midday break, and the index briefly dipped into negative
territory. Lee Wai Kit, a financial commentator of TF International, told ET Net News
Agency that Hong Kong stocks remain in a wait-and-see mode, focused on central bank policy
meetings worldwide. He noted that while the US Fed is still widely expected to cut rates
this month, much of the good news has already been priced in, and markets are now looking
ahead to next year's rate path. Combined with year-end caution, Lee sees near-term
resistance for the HSI around 26,200. That said, with the Q3 results season now over and
many major tech stocks posting solid numbers, he believes they will help underpin the
market. However, further gains will require fresh catalysts, and he does not rule out the
possibility of the HSI testing 27,000 this month if a new trigger emerges.
Reflecting on last year's hawkish BOJ pivot, which ended eight years of negative rates
and abruptly triggered a major yen carry trade unwind and sharp equity selloff across
Asia, Lee explained that recent volatility in Japanese equities and bonds is again rooted
in fears of another carry trade unwind. If the BOJ hikes rates, there could be a temporary
shock to global markets. However, with more than two weeks until the BOJ meeting, Lee
believes recent moves are part of a deliberate effort to let markets digest these risks
early, so that any impact post-hike is more muted. He cautions, however, that global
markets are likely to remain volatile in the interim.

"Auto makers' monthly volume swings now key, new businesses needed for re-rating"

As automakers begin releasing monthly delivery figures, results are diverging, with most
showing year-on-year increases but a slowdown or even declines month-on-month, as seen
with NIO (09866) and XPeng (09868). Lee Wai Kit said that while annual growth is positive,
the market is paying closer attention to month-on-month changes. For example, BYD (01211)
saw November deliveries fall 5% year-on-year, but a near 9% rise from October, which
helped lift its share price today.
Still, Lee acknowledged that operational pressures are mounting, making it difficult for
automakers to significantly accelerate delivery growth in the near future. He does not
believe the domestic auto market is saturated, but expects growth to remain gradual. For
carmakers to regain high growth, rapid expansion in overseas markets will be key, though
this is subject to country-specific policy risks and is generally less under their
control. Lee also highlighted that new business initiatives or concepts can drive
valuations, citing GAC Group (02238), whose share price rallied after announcing new
vehicle R&D collaborations with JD.com (09618) and CATL (03750). He believes that only by
pursuing new business lines or innovative concepts can automakers achieve a significant
re-rating.