[ET Net News Agency, 16 January 2026] US stocks closed broadly higher on Thursday (15th), snapping a two-day losing streak. Strong quarterly results from TSMC (US.TSM) and leading Wall Street banks boosted chip and banking shares, while the latest economic data showed improved prospects for US manufacturing, lifting market sentiment. In Hong Kong, after a brief pause yesterday, the HSI again attempted to break the 27,000 mark this morning. However, the market opened higher only to lose all its early gains, even turning negative at one point. By midday, the HSI was holding around 26,851, down 71 points. The Hang Seng China Enterprises Index dropped 64 points, or 0.7 per cent, to 9,229, while the Hang Seng Tech Index slipped 0.2 per cent to 5,815.
"Nip Chun Pong: 10 basis points of rate cut space expected for 2026"
Yesterday, the People's Bank of China officially announced a 25 basis point cut to several structural monetary policy tool rates, which the market regards as a "New Year gift" for economic work in 2026, aimed at further supporting the real economy through a more accommodative monetary environment. Market expectations for rate cuts in 2026 remain steady, with most forecasting around 10 basis points of room for reductions over the year.
Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the PBOC's decision to signal easing at the start of the year is based on three main considerations. First, for sectors such as food delivery and e-commerce platforms facing fierce "internal competition" and price wars, the government is expected to introduce regulatory measures. These will be supported by interest rate adjustments and industrial guidance to stabilise market pricing structures. Second, to coordinate with the "trade-in" policy, and continue the policy direction set by the NDRC and Ministry of Finance at the end of last year, the next wave of national policies will focus on supporting the consumption of durable goods, especially new energy vehicles. Third, the next stage of policy will likely shift toward supporting the de-stocking of commercial real estate, with rate cuts reducing holding and financing costs to help stabilise the property market.
Nip highlighted that the government wants to use monetary and fiscal policy in tandem starting in 2026 to boost consumption across industries. He believes interest rate adjustments will not only ease burdens on businesses but also help revive the long-struggling property sector, providing a positive push for overall economic recovery.
"Watch for risk of early BOJ rate hike"
Despite the PBOC's easing measures, the market reaction was muted, with the HSI still unable to break above 27,000. Nip pointed out that the HSI has seen "rally and retreat" patterns for four consecutive sessions since Tuesday (13th). Reviewing the trading between 9 and 13 January, he noted several upward gaps, with key support around 26,600 points. As long as the HSI holds above this level during pullbacks, there is optimism for another attempt to break and hold 27,000 this month. Nip suggests watching whether the HSI can close above 27,200 as a key gauge of market strength going forward.
With the Bank of Japan's policy meeting and an early general election coming up, uncertainty over Japanese monetary policy is rising, increasing the likelihood of a rate hike as early as April. Nip warns that this could trigger unwinding of yen carry trades. In the past, some aggressive investors have financed Hong Kong stock positions with low-interest yen. If Japan raises rates and borrowing costs rise, investors may be forced to stop borrowing yen or even sell Hong Kong stocks to cover yen debts, which would put downward pressure on the HSI. Additionally, any resulting US stock sell-off would weigh on Hong Kong as well. For now, the key technical level is whether 26,600 support can hold.
"Ali Health's rally on new drug news has faded"
Recently, both Ali Health (00241) and JD Health (06618) surged on positive news about exclusive global launches of new drugs. Nip believes these catalysts have now been largely priced in, with profit-taking emerging as share prices retreat from recent highs. Ali Health, for example, dropped below the HKD 7 mark after hitting nearly HKD 7.3 today, reflecting heavy resistance at higher levels. Without fresh positive news, the risk of further correction remains.
For investors considering entry, Nip suggests a wait-and-see approach for Ali Health. He recommends first watching to see if the share price can hold above HKD 6.50 over the next couple of sessions. If it fails to hold, there is a risk of a further drop to HKD 6 or even lower. Only after the stock stabilises should investors consider a medium- to long-term position.
"Nip Chun Pong: 10 basis points of rate cut space expected for 2026"
Yesterday, the People's Bank of China officially announced a 25 basis point cut to several structural monetary policy tool rates, which the market regards as a "New Year gift" for economic work in 2026, aimed at further supporting the real economy through a more accommodative monetary environment. Market expectations for rate cuts in 2026 remain steady, with most forecasting around 10 basis points of room for reductions over the year.
Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the PBOC's decision to signal easing at the start of the year is based on three main considerations. First, for sectors such as food delivery and e-commerce platforms facing fierce "internal competition" and price wars, the government is expected to introduce regulatory measures. These will be supported by interest rate adjustments and industrial guidance to stabilise market pricing structures. Second, to coordinate with the "trade-in" policy, and continue the policy direction set by the NDRC and Ministry of Finance at the end of last year, the next wave of national policies will focus on supporting the consumption of durable goods, especially new energy vehicles. Third, the next stage of policy will likely shift toward supporting the de-stocking of commercial real estate, with rate cuts reducing holding and financing costs to help stabilise the property market.
Nip highlighted that the government wants to use monetary and fiscal policy in tandem starting in 2026 to boost consumption across industries. He believes interest rate adjustments will not only ease burdens on businesses but also help revive the long-struggling property sector, providing a positive push for overall economic recovery.
"Watch for risk of early BOJ rate hike"
Despite the PBOC's easing measures, the market reaction was muted, with the HSI still unable to break above 27,000. Nip pointed out that the HSI has seen "rally and retreat" patterns for four consecutive sessions since Tuesday (13th). Reviewing the trading between 9 and 13 January, he noted several upward gaps, with key support around 26,600 points. As long as the HSI holds above this level during pullbacks, there is optimism for another attempt to break and hold 27,000 this month. Nip suggests watching whether the HSI can close above 27,200 as a key gauge of market strength going forward.
With the Bank of Japan's policy meeting and an early general election coming up, uncertainty over Japanese monetary policy is rising, increasing the likelihood of a rate hike as early as April. Nip warns that this could trigger unwinding of yen carry trades. In the past, some aggressive investors have financed Hong Kong stock positions with low-interest yen. If Japan raises rates and borrowing costs rise, investors may be forced to stop borrowing yen or even sell Hong Kong stocks to cover yen debts, which would put downward pressure on the HSI. Additionally, any resulting US stock sell-off would weigh on Hong Kong as well. For now, the key technical level is whether 26,600 support can hold.
"Ali Health's rally on new drug news has faded"
Recently, both Ali Health (00241) and JD Health (06618) surged on positive news about exclusive global launches of new drugs. Nip believes these catalysts have now been largely priced in, with profit-taking emerging as share prices retreat from recent highs. Ali Health, for example, dropped below the HKD 7 mark after hitting nearly HKD 7.3 today, reflecting heavy resistance at higher levels. Without fresh positive news, the risk of further correction remains.
For investors considering entry, Nip suggests a wait-and-see approach for Ali Health. He recommends first watching to see if the share price can hold above HKD 6.50 over the next couple of sessions. If it fails to hold, there is a risk of a further drop to HKD 6 or even lower. Only after the stock stabilises should investors consider a medium- to long-term position.