Investment Insights

CIO Viewpoints

 High-Dividend Hong Kong Equities Offer Defense as AI Concerns Rise

Daily Insights

Focus of the Day

  • Philadelphia semiconductor index previously logged eight-day losing streak

Other Commentaries

  • Brazil’s Lula wins re-election; Eurozone PMI slides to four-month low; Japan’s September CPI tops BOJ target for first time

Market Analysis

FX Markets Analysis

Latest Technical Highlights

CAD - Uptrend↗

Support / Resistance

vs HKD 5.5236 / 5.6837

vs USD 1.38 / 1.42

The recent resurgence in crude oil’s geopolitical premium has directly improved the outlook for Canada’s energy export revenues. Higher oil prices could also make local inflationary pressures more persistent, prompting markets to revise up expectations for Bank of Canada rate hikes and supporting the Canadian dollar

 

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

  • Concerns over AI investment returns weighed on technology stocks, while higher oil prices stoked inflation fears. Rotation accelerated into energy, healthcare and financials, with the Federal Reserve decision in focus.
  • Persistent Middle East tensions may keep European energy prices and inflation elevated. Higher-for-longer rates and French political uncertainty could pressure near-term valuations.
  • Risk aversion rose across Asia-Pacific equities amid concerns over AI financing and returns, compounded by escalating Middle East tensions. Diversification across regional markets and sectors may help mitigate risk.
  • The US Dollar Index remained elevated, though emerging-market economies were broadly resilient. Commodity-price swings and country-specific election outcomes may drive volatility.
  • Southbound flows remained negative ahead of the mainland offshore-trust tax deadline, though selling pressure may ease after it passes. Hang Seng Index reached oversold levels, with near-term support at 22,500.
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

  • A sharp US technology sell-off and volatility in French bonds boosted haven demand, pushing the 10-year Treasury yield below 5% for the first time in a month.
  • The technology-stock correction and macro uncertainty drives investors to increase allocations to high-quality fixed-income assets.
  • Major Asian central banks maintained a cautiously restrictive stance. The Bank of Korea, the People’s Bank of China and Bank Indonesia kept policy rates unchanged last week.
  • US high yield weakened as concerns over AI investment returns, higher oil prices and rising geopolitical risks widened spreads. Risk appetite remained cautious.
  • Asian high yield remained pressured by risk aversion, while Indonesia’s potential market-classification downgrade spilled into corporate bonds. The move does not signal broad deterioration in regional credit quality.
  • Emerging-market dollar bonds weakened, while local-currency debt edged higher and continued to draw inflows. India was supported by economic momentum and liquidity, though oil-driven inflation risks warrant monitoring.
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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