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HK stock market outlook in 2026 (Chinese only)

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How to position for equities, bonds, and FX in 2026?

Daily Insights

Focus of the Day

  • Russell 2000 Index reached a new high for the second day, with the Fed's dovish remarks adding momentum

Other Commentaries

  • China’s Central Economic Work Conference advocated for consumer stimulus and property market stability; Australia’s November employment unexpectedly fell; the Philippines central bank cut rates for the fifth time this year

Market Analysis

FX Markets Analysis

Latest Technical Highlights

AUD - Uptrend↗

Support / Resistance

vs HKD 5.0570 / 5.2126

vs USD 0.65 / 0.67

At the December meeting, the Reserve Bank of Australia expressed concerns about rising inflation and noted tight conditions in the labour market. Their remarks have strengthened market confidence that the Australian dollar's rate-cutting cycle may have ended

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

*Pertaining to historical technical trend analysis only and do not reflect any forecasts or any forward looking views

Provided by Hang Seng Investment Services Limited

Stock Markets View

  • Rate cut expectations have lifted the technology and semiconductor sectors, briefly pushing the S&P 500 toward its October all-time high. However, investor caution persists ahead of the upcoming Fed policy decision
  • Improving Eurozone business activity supports the outlook for European equities, though markets remain attentive to signals that the ECB may pause its easing cycle in the near term, alongside developments in Russia-Ukraine peace talks
  • Resilient regional growth, combined with a potential ongoing downtrend in US rates, provides greater scope for Asian central banks to implement supportive policy measures, which should underpin equity performance
  • A recent pullback in the US dollar has spurred a rebound across emerging markets, particularly in Latin American equities. However, geopolitical and election-related risks in certain EMs warrant monitoring
  • Hang Seng Index hovers around the 26,000 level, with near-term sentiment hinging on further policy support from Beijing. The impending roll-out of the 15th Five-Year Plan, however, is expected to provide momentum for Hong Kong stocks
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

Bond Markets View

  • The latest US inflation data met expectations, setting the stage for a Fed rate cut in December. However, market focus on interest rate guidance for next year could induce volatility in US Treasury yields in the short term
  • Higher US Treasury yields weighed on US investment-grade credit over the week. Financials were the relative outperformers, while Healthcare and Communications sectors lagged
  • The Reserve Bank of India cut its policy rate by 25bps to 5.25% in its December meeting, in line with expectations. Subdued inflation provides room for further monetary easing
  • US high-yield bonds have been supported by rate cut expectations, with yields reaching cycle lows and new issuance remaining active. The path ahead will depend on the evolution of Fed policy and economic data
  • Several Chinese local governments have continued to roll out measures such as home-purchase subsidies to lower entry barriers, which should help cushion downside pressure in the property sector. However, demand recovery may take time, warranting close monitoring of sales data
  • Argentina’s return to the international capital markets with a USD sovereign bond issuance has bolstered regional sentiment. Coupled with ongoing monetary easing in India, the backdrop for emerging market debt remains supportive
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

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