[ET Net News Agency, 08 November 2024] The Federal Reserve cut interest rates by a
quarter of a percentage point as the market expected. The Dow closed flat overnight, and
the S&P 500 and Nasdaq hit new closing highs. Chinese concept stocks generally rose, with
JD.com (JD) rising 6.6% and Xpeng (XPEV) soaring 15.6%. Coupled with the overnight high of
more than 300 points, momentum were building for Hong Kong stocks this morning. The Hang
Seng Index opened more than 200 points higher and once rose to more than 400 points
shortly after the market opened. However, encountering resistance at high levels and the
downward trend of A-shares dragged down Hong Kong stocks to close down for half a day.
The Hang Seng Index closed at 20,767 on a half-day basis, down 185 points or 0.9%, and
the main board turnover was nearly HKD 141.2 billion. The Hang Seng China Enterprises
Index reported at 7,474, down 72 points or 1%. The Hang Seng Tech Index was at 4,683, up 5
points or 0.1%.

"Ryan Chan: The great resistance at the 21,000 mark is due to the presence of tied-up"

Today, the Hang Seng Index broke through the 21,000 mark at the opening of the market,
then fell all the way, and fell back to below 21,000. Ryan Chan, an executive director of
Eddid Financial, told ET Net News Agency that the resistance to round numbers is
relatively large, mainly because of the existence of certain tied-up. However, he pointed
out that the recent market sentiment is not pessimistic. It has found support at 20,200
points in the past month, and the transaction volume has also increased significantly
recently. He believes that in the short-term, Hang Seng Index will find resistance at
21,600 points, which is the high of 10 October. If it can break through this resistance
level, the Hang Seng Index is expected to challenge 23,000 points.
The distribution of CBBCs on the street shows that the most newly added areas for Bear
Contracts today have dropped to the range of 21,600 to 21,699, but only 80 of the total
296 are new.
The previous night, the Federal Reserve announced the results of its interest rate
meeting, cutting interest rates by 0.25% as expected by the market. Ryan Chan said that
because the interest rate discussion results are in line with market interest rates, there
will be little stimulation for Hong Kong stocks. Moreover, the market is generally waiting
to see whether Fed Chairman Jerome Powell will be fired after Trump takes office. The
market has a strong wait-and-see atmosphere.

"A stronger U.S. dollar will have little direct impact on Chinese property stocks"

After Trump won the election, the market expected that the U.S. dollar would strengthen
due to Trump's policies such as corporate tax cuts and external tariffs, which would
further depreciate the RMB. The offshore RMB against the U.S. dollar (CNH) rebounded over
560 points and crossed the 7.15 mark overnight, but then fell again and is now at 7.1614
points. Chinese property stocks generally retreated today: Longfor (00960) fell 3% to HKD
14.12; Sunac (01918) fell 1.9% to HKD 3.54; China Overseas (00688) fell 1.5% to HKD 15.72.
Ryan Chan believes that the performance of the RMB has a relatively small direct impact
on Chinese property stocks. Although Trump's coming to power will affect the market's
expectations for interest rates, funding and other data, and if the pace of U.S. interest
rate cuts slows down, China's monetary policy will also have lesser room to operate. He
pointed out that the main problems of Mainland China housing are the large stock of real
estate, insufficient demand, and problems with the capital flow of real estate companies.
These situations cannot be improved solely by monetary policy. In terms of individual
stocks, he believes that Longfor (00960) sees support at HKD 12 and resistance at HKD 16;
Sunac (01918) has resistance at HKD 4.5, but he reminds that Sunac is relatively volatile
and has a lot of debt. Caution is required.

"The Fed is expected to slow down the pace of interest rate cuts next year"

Some analysts pointed out that with the re-election of former U.S. President Trump, his
tariffs and fiscal policies may cause inflation to rise again, causing the Federal Reserve
to slow down the pace of interest rate cuts next year. Ryan Chan also agreed that the
Federal Reserve will slow down the pace of interest rate cuts next year. He said that the
ultra-low interest rate environment will not help the economy much and will generate asset
bubbles. This is something that no central bank is happy to see, so the Federal Reserve
will consider the economy and they will be more cautious about cutting interest rates. He
continued that under conditions of high inflation, the Federal Reserve will also be
cautious, so it is reasonable to slow down the pace of interest rate cuts next year.