Investment Insights

CIO Viewpoints

 2026 Asia Equities: Abundant Pontential

Daily Insights

Focus of the Day

  • Driven by Chinese tech stocks, Hang Seng Index broke above multiple moving averages

Other Commentaries

  • Asian tech stocks attracted capital early in the new year; China's 2026 property market targeting inventory reduction; US capture of  Venezuelan president draw market focus to oil price trends

Market Analysis

FX Markets Analysis

Latest Technical Highlights

AUD - Uptrend↗

Support / Resistance

vs HKD 5.1348 / 5.3682

vs USD 0.66 / 0.69

Due to rebounding inflation in Australia, coupled with a hawkish tone in the Reserve Bank of Australia's December meeting minutes, the market is widely betting that the RBA will raise interest rates in 2026, while the Federal Reserve's rate-cutting cycle will continue. This divergence in monetary policy is supporting the Australian dollar's rise.

 

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

  • US equities rallied to fresh highs in the typical “Santa Claus rally,” driven by robust GDP data and strength in the AI sector, but recent rapid advances and low liquidity suggest caution over short-term pullbacks
  • The ECB raised its 2026 eurozone growth forecast at its December meeting. Stronger domestic demand may support European equities, especially traditional sectors
  • Robust US data and a weaker dollar helped Asian equities post their best weekly gains recently. Further Fed rate cuts in 2026 should remain positive for the region
  • Latin American equities and currencies performed well in 2025, but geopolitical risks and elections in 2026 may result in higher volatilities
  • Following a period of consolidation since October, the Hang Seng Tech Index has shown positive RSI divergence. Delayed US tariffs and new GPU listings in Hong Kong could boost sentiment in the tech sector
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

  • Strong US GDP supports resilience, but weaker consumer confidence raises sustainability concerns. US Treasury yields may stay range-bound short term
  • Despite a better US outlook, investment-grade bond issuance is near record highs, driven by data center financing. Bond prices may trade within a narrow range
  • China’s National Industry and Information Technology Work Conference emphasized the development of new industrialization and high-end manufacturing, which could help improve corporate earnings and cash flow expectations, supporting the sector’s credit fundamentals
  • Market turnover was low during the Christmas holidays, with US high-yield spreads slightly widened. Investors should monitor upcoming data releases and changes in rate expectations in early January
  • Supportive property policies and eased restrictions in tier 1 cities help stabilize sentiment. However, property developers still face debt pressures, and Asian high-yield bonds are likely to remain volatile in the near term
  • Emerging market bonds continued to trend higher. Indian USD bonds are expected to benefit from recent robust economic data and the signing of a trade agreement with New Zealand, supporting ongoing sector strength
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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