Investment Insights

CIO Viewpoints

Why do Asia equities still offer opportunities after the AI sell-off, and where’s the resilience?

Daily Insights

Focus of the Day

  • KOSPI slides towards key technical support level 

Other Commentaries

  • Saudi Aramco mulls tweaks to Asia crude freight rates; Malaysia growth outlook stays constructive; China AI-related exports remain robust

Market Analysis

FX Markets Analysis

Latest Technical Highlights

CNH - Uptrend↗

Support / Resistance

vs HKD 1.1447 / 1.1617

vs USD 6.75 / 6.85

Escalating Middle East tensions have recently slowed the renminbi’s appreciation. Attention is now on the CCP Politburo meeting in late July, with markets watching for H2 policy guidance and potential stimulus measures. Such signals are expected to help underpin the renminbi’s exchange rate

 

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

  • Markets are reassessing the earnings payback from AI-related capex. Meanwhile, higher oil prices are lifting expectations for further rate hikes, adding pressure on tech valuations and accelerating a rotation into energy and other old-economy/cyclical sectors.
  • Energy stocks are poised to drive European earnings growth in 1H to the strongest pace in nearly three years. However, renewed escalation in the Middle East and elevated commodity prices could reintroduce inflation shocks and weigh on European equities.
  • Ongoing weakness in US tech is keeping pressure on Korean equities. Near-term direction is likely to hinge on tech earnings and guidance on AI capex. That said, ASEAN equities and Hong Kong equities are seeing supportive inflows.
  • The US–Iran conflict may prove difficult to resolve quickly; investor concerns around the Strait of Hormuz and energy supply disruptions are likely to persist, potentially dampening risk appetite for EM allocations in the near term.
  • Recent comments from the CSRC and equity purchases by funds under SASAC have helped stabilise A-share sentiment. Expectations that the upcoming Politburo meeting could deliver incremental pro-growth measures may further support the A-share rebound.
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

  • Escalating Middle East tensions are pushing up inflation expectations, driving global bond prices lower and yields higher.
  • As of 24 July, rising US long-end yields weighed on performance: US investment-grade corporates fell 0.9% WoW, with spreads modestly wider by 2bp.
  • The energy segment fell 0.6% WoW as broader risk-off sentiment and inflation concerns dominated, leading to wider credit spreads for energy issuers.
  • Risk appetite has cooled materially amid rising concerns over the sustainability of AI-driven growth and inflation. The sector is likely to remain sentiment-led with elevated volatility.
  • Spreads tightened sharply after a proposal for a 10-day US–Iran ceasefire. Gaming revenues may soften modestly as the World Cup diverts spending, but the summer peak season could support a rebound.
  • Bank Indonesia unexpectedly kept rates unchanged at 5.75%, balancing FX stability and capital inflows with growth considerations—potentially supportive for sentiment and the local bond market. Focus remains on regional rate trajectories and fundamentals.
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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