[ET Net News Agency, 28 January 2026] The US dollar has experienced a sharp decline in recent days. US President Trump, when questioned about the drop, denied any concerns, instead insisting "the dollar is doing great", a comment that only triggered further declines in the greenback. The renminbi's central parity rate against the US dollar was set at 6.9755 today, up 103 pips from the previous session, marking its strongest level since 17 May 2023, over two and a half years. The renminbi's strength has continued to underpin gains in Hong Kong stocks. The Hang Seng Index opened nearly 200 points higher and surged throughout the morning, boosted by the "China Special Valuation" theme, with the rally at one stage exceeding 600 points. By midday, the HSI was up 598 points, or 2.2%, at 27,725, a four-and-a-half-year high, with main board turnover surpassing HKD 196.3 billion. The Hang Seng China Enterprises Index gained 218 points or 2.4% to 9,463. The Hang Seng Tech Index climbed 100 points or 1.7% to 5,854.
"Mak Ka Ka: Capital flows into Chinese assets lift renminbi; ahead of lunar new year, profit-taking advised on short-term trades"
With US dollar assets under pressure, US President Trump's dismissive remarks prompted the dollar index to slide further, at one point falling below 96. The weakness of US assets has driven a clear return of capital to Chinese and Hong Kong equities, with the Hang Seng Index regaining 27,000 and strong fund flows evident this morning. Mak Ka Ka, Head of Financial Products Trading and Research Department of SinoPac Securities (Asia), told ET Net News Agency that recent geopolitical tensions have undermined market confidence in the US dollar, leading to clear capital outflows and renewed appetite for Chinese assets. This is largely due to expectations of a stable economic recovery in China and the relative cheapness of valuations in Chinese AI stocks, both of which have driven demand for the renminbi.
With the renminbi's strength complementing local stocks, Mak expects Hong Kong equities to maintain a firm tone in the short run. She believes the dollar's weakness will likely persist, influenced by both geopolitical factors and concerns over the Federal Reserve's independence, which continue to erode confidence in the greenback. Combined with the seasonal increase in renminbi settlement demand ahead of Lunar New Year, she forecasts the currency will stay strong at least through the holiday. For the Hang Seng Index, 27,000 will serve as a psychological level in the near term, with initial resistance seen at 27,800. However, she cautions that an excessively strong renminbi would not be favourable for Chinese exports, and if the currency continues to rise, the People's Bank of China may be more inclined to intervene.
Although the HSI is expected to hover at higher levels before the Lunar New Year, Mak warns that "the higher you go, the thinner the air," and investors should consider their positioning. Historically, markets often face a pullback after the holiday. She recommends those with short-term trading positions take profits ahead of the break, while core holdings such as tech, consumer, or high-dividend stocks can be held through, as any short-term correction is unlikely to affect their longer-term performance.
"High oil prices likely to trigger Trump response; CNOOC suited to trading, PetroChina for stability"
Ongoing uncertainty over Iran has prompted Trump to announce that US naval forces are heading to the region, intensifying market concerns and driving oil prices higher. Overnight, NYMEX crude climbed back above USD 62 per barrel, a more than three-month high. China's three major oil stocks surged, with both CNOOC (00883) and PetroChina (00857) up over 5% by midday. Mak noted that recent days have seen clear fund inflows into oil names amid expectations that the Iranian situation will not be resolved quickly, supporting stronger oil prices and increasing interest in oil shares. However, she stressed that Trump, as a businessman, has little appetite for persistent high oil prices, which hurt business and stoke inflation. Should prices remain elevated, she expects intervention from Trump, so the rally in oil prices is unlikely to last for long. With oil stocks having already logged substantial gains, further upside in the short term may be limited.
Despite this, the three oil majors remain attractive for their strong dividend yields and "China Special Valuation" status, which should cushion any correction if oil prices retreat. Among the three, CNOOC is more sensitive to oil prices and has a high weighting in southbound investor holdings, up to 3.5%, making it more volatile but also offering greater risk and reward. Mak suggests that risk-tolerant investors can use CNOOC for short-term trades but should be mindful of profit-taking pressures after sharp gains.
By contrast, PetroChina is less sensitive to oil prices, so any pullback is likely to be more modest; initial support is expected around HKD 8.2. Recent reports indicate the US has tightened control over Venezuela, and Reuters says PetroChina has told its traders to avoid Venezuelan crude. Mak analysed that while PetroChina has significant investments in Venezuela's oil sector, the overall impact is not huge. The main issue is the need to source alternative supplies, which could raise costs and limit upside, but is unlikely to trigger heavy selling pressure.
"Mak Ka Ka: Capital flows into Chinese assets lift renminbi; ahead of lunar new year, profit-taking advised on short-term trades"
With US dollar assets under pressure, US President Trump's dismissive remarks prompted the dollar index to slide further, at one point falling below 96. The weakness of US assets has driven a clear return of capital to Chinese and Hong Kong equities, with the Hang Seng Index regaining 27,000 and strong fund flows evident this morning. Mak Ka Ka, Head of Financial Products Trading and Research Department of SinoPac Securities (Asia), told ET Net News Agency that recent geopolitical tensions have undermined market confidence in the US dollar, leading to clear capital outflows and renewed appetite for Chinese assets. This is largely due to expectations of a stable economic recovery in China and the relative cheapness of valuations in Chinese AI stocks, both of which have driven demand for the renminbi.
With the renminbi's strength complementing local stocks, Mak expects Hong Kong equities to maintain a firm tone in the short run. She believes the dollar's weakness will likely persist, influenced by both geopolitical factors and concerns over the Federal Reserve's independence, which continue to erode confidence in the greenback. Combined with the seasonal increase in renminbi settlement demand ahead of Lunar New Year, she forecasts the currency will stay strong at least through the holiday. For the Hang Seng Index, 27,000 will serve as a psychological level in the near term, with initial resistance seen at 27,800. However, she cautions that an excessively strong renminbi would not be favourable for Chinese exports, and if the currency continues to rise, the People's Bank of China may be more inclined to intervene.
Although the HSI is expected to hover at higher levels before the Lunar New Year, Mak warns that "the higher you go, the thinner the air," and investors should consider their positioning. Historically, markets often face a pullback after the holiday. She recommends those with short-term trading positions take profits ahead of the break, while core holdings such as tech, consumer, or high-dividend stocks can be held through, as any short-term correction is unlikely to affect their longer-term performance.
"High oil prices likely to trigger Trump response; CNOOC suited to trading, PetroChina for stability"
Ongoing uncertainty over Iran has prompted Trump to announce that US naval forces are heading to the region, intensifying market concerns and driving oil prices higher. Overnight, NYMEX crude climbed back above USD 62 per barrel, a more than three-month high. China's three major oil stocks surged, with both CNOOC (00883) and PetroChina (00857) up over 5% by midday. Mak noted that recent days have seen clear fund inflows into oil names amid expectations that the Iranian situation will not be resolved quickly, supporting stronger oil prices and increasing interest in oil shares. However, she stressed that Trump, as a businessman, has little appetite for persistent high oil prices, which hurt business and stoke inflation. Should prices remain elevated, she expects intervention from Trump, so the rally in oil prices is unlikely to last for long. With oil stocks having already logged substantial gains, further upside in the short term may be limited.
Despite this, the three oil majors remain attractive for their strong dividend yields and "China Special Valuation" status, which should cushion any correction if oil prices retreat. Among the three, CNOOC is more sensitive to oil prices and has a high weighting in southbound investor holdings, up to 3.5%, making it more volatile but also offering greater risk and reward. Mak suggests that risk-tolerant investors can use CNOOC for short-term trades but should be mindful of profit-taking pressures after sharp gains.
By contrast, PetroChina is less sensitive to oil prices, so any pullback is likely to be more modest; initial support is expected around HKD 8.2. Recent reports indicate the US has tightened control over Venezuela, and Reuters says PetroChina has told its traders to avoid Venezuelan crude. Mak analysed that while PetroChina has significant investments in Venezuela's oil sector, the overall impact is not huge. The main issue is the need to source alternative supplies, which could raise costs and limit upside, but is unlikely to trigger heavy selling pressure.