Investment Insights

CIO Viewpoints

Hang Seng Index surged in January, what's the next catalyst? 

Daily Insights

Focus of the Day

  • The Hang Seng Index returned to a sideways range, with short-term support at 26,300

Other Commentaries

  • US cut tariffs on India from 50% to 18%; oil prices saw their largest daily drop in over six months; South Korean stocks plunged, triggering the market circuit breaker

Market Analysis

FX Markets Analysis

Latest Technical Highlights

EUR - Uptrend↗

Support / Resistance

vs HKD 9.0248 / 9.3360

vs USD 1.16 / 1.20

The nomination of Warsh as the next Federal Reserve Chair has strengthened the US dollar and tempered expectations of interest rate cuts. Nevertheless, evolving global trade dynamics and possible changes in the EU’s US dollar asset holdings are likely to continue providing support for the euro

 

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

  • Corporate earnings remain mixed, with defensive sectors showing resilient profitability while tech faces headwinds from moderating cloud growth and shifting rate expectations. Elevated volatility is likely to drive continued sector rotation
  • Q4 GDP outperformed expectations and unemployment fell to its lowest level in over a year. The economy continues to expand modestly, with potential further support from increasingly proactive fiscal spending
  • Despite near-term policy uncertainty in the US and a pullback from recent highs, sustained global AI demand underpins the structural appeal of key Asian markets within the AI supply chain over the longer term
  • Year-to-date emerging market performance has been supported by a softer USD and rising commodity prices, though geopolitical risks in regions such as Latin America and the Middle East, alongside commodity price volatility, warrant close attention
  • The Hang Seng Index faces near-term resistance. Markets are focused on the new Fed Chair's stance for capital flow cues, while the Mainland's 15th Five-Year Plan and AI commercialization remain structural driver
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 nomination of hawk-leaning Warsh as the next Fed Chair has steepened the US yield curve. Market focus now shifts to the January employment report
  • US investment-grade corporates saw modest profit-taking. Financials and real estate outperformed, while communications and healthcare lagged
  • Korea’s strong January export growth, driven by resilient semiconductor demand, should support the performance of related issuers
  • US high yield extended its rally amid economic resilience and active primary issuance, though caution around the new Fed Chair’s policy stance may sustain volatility
  • Pre-Lunar New Year sales saw a brief rebound in Tier-1 cities, but demand recovery remains uneven. Property credit improvement will be gradual and fragmented, likely keeping Asia high-yield bonds volatile
  • Progress on trade and investment openness between India and the EU helps lower external trade uncertainty, stabilises cash flow expectations for sovereigns and corporates, and supports emerging market USD bonds
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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