Tech Stocks Drive Hong Kong Market as Asian Equities Fail
Tech stocks drive Hong Kong Market. It has been promoted to significant exchange bureaus in Asia; Increasing losses, monetary easing, and fiscal stimulus protect local markets; investors are worried about the risk of hard access caused by tightening policies in the U.S.
The Hang Seng index rose 1.1 percent at the end of trading on Friday, up to 21,075.00, While the technical index increased by 2.3 percent. Friday gains helped reduce the decline for the week. The Shanghai Composite Index increased 1 percent.
JD.com rose 6.1 percent to $H.K.61.20. Meituan also strengthened 5.2 percent to H.K. $H.K.99.10. Alibaba added 2.1 percent to $H.K.04.50. The AIA won 2.2 percent and $H.K.9.35. Haidilao and Xiaomi rated at least 3.6 percent. Major markets in the region have deteriorated. In South Korea, Japan, and Australia, rates fell from 0.4 to 1.8 percent. The large Asia-Pacific market gave up all its profits on Thursday following the Fed rally; Some managers of the Global Fund have raised concerns about the recession.
Alpine Macro strategists estimate that the momentum of global growth will shift from the U.S. to China and the developing world. China will reopen and apply a highly stimulating macro policy until the Fed tightens. China’s credit cycle should revive, boost infrastructure spending and revive the housing sector, where stress is at its peak.
Tech Stocks and the Fed
The Federal Reserve raised its key interest rate by 75 basis points at its June 15 meeting. This is the largest since 1994. This was followed by 75 baseline points from the previous two meetings. Global stocks entered bear territory earlier this week. Investors are still divided if further growth this year will lead the global economy into recession.
Global stocks were heading for the worst week since the COVID-19 pandemic in March 2020. The Swiss central bank made a shocking increase of 50 basis points, While the Bank of England raised the interest rate for the fifth time in a row. In contrast, Chinese stocks have become a haven from global destruction. Foreign investors bought more Chinese stocks on the appraisal appeal. The Hang Seng index recovered 14 percent; After reaching a multi-year low after the March 15 sale. Goldman Sachs said the worst was over.
What to Expect
The Hang Seng Index is still weak at 3.4 percent per week, albeit after entering a two-week profit series. Hong Kong has reported more than 1,000 cases for the first time since March. The local dollar traded at the weakest point of the trading range, which required central bank intervention.
The manager of Pegasus Fund Managers said he was slightly negative about shares in Hong Kong. There is no ray at the end of the burrow yet. This could affect the city’s mortgage rates, cost, overruns, and retail.
Three companies traded on the mainland for the first time. Jiangsu Ruitai New Energy Materials rose 85 percent on Shenzhen’s first trading day. Emerging markets stocks are due to end on Friday, With their most significant weekly decline in over three months. Because of the growing fear of a global recession. Central banks worldwide are aggressively tightening monetary policy to combat rising inflation. The MSCI index for E.M. stocks fell 0.2%; decreasing by 4.6% during the week.
This is the worst rate since March. Emerging market assets have been hit by the developing world central banks raising their policy rates. The U.S. Federal Reserve has seen the most significant rate hike in more than a quarter of a century.
This led to concerns about the world’s largest economy turning into a recession, and when China, along with the renewed closure of COVID, began to impact the economy. The hike led to an escape from more risky emerging-market assets. Investors are turning to safer bets and becoming more defensive.
Central banks’ aggressive line strengthens resistance to both economic growth and stocks. The recession risks are rising, and achieving soft access to the U.S. economy looks increasingly challenging. The expected drop in inflation was hampered by rising energy and food prices caused by the Ukraine war. Delays caused by the pandemic also lasted longer than expected.
Turkish stocks fell almost 2% in the week. South African stocks fell 2.3%; There was a drop in both stocks in the second week. Emerging market currencies struggled to move forward most of the week. The weekly decline in the MSCI index was 0.5%. The index is lower in the second week. The Turkish lira fell 0.2% and was on its way to falling for the ninth consecutive week. Worst losing streak since the December 2021 currency crisis, caused by the non-ordinary monetary policy against the background of high inflation.