HK Stock Market Move | Internal insurance stocks extended gains in late trading, regulatory guidance continues to lead insurance companies to reduce their debt costs, and the rise of long-term interest rates is helpful in easing allocation pressure.

In the final trading session, the gains of insurance stocks widened. As of the time of writing, New China Life Insurance (01336) rose by 6.89% to 28.7 Hong Kong dollars; China Pacific Insurance (02601) rose by 6.39% to 25.8 Hong Kong dollars; The People's Insurance (01339) rose by 5.12% to 4.11 Hong Kong dollars; Ping An Insurance (02318) rose by 4.73% to 48.7 Hong Kong dollars. Soochow pointed out that the market's demand for savings remains strong. With regulators continuously guiding insurance companies to lower their debt costs, the interest rate spread pressure of insurance companies is expected to gradually ease. The recent rise in the yield of the ten-year national bonds to around 1.72%, the bank expects that with the recovery of the domestic economy in the future, if long-term interest rates stabilize or rise, the pressure on insurance companies' new fixed-income investment returns will be alleviated. China Securities Co., Ltd. pointed out that the recent rise in long-term interest rates will help alleviate the pressure on insurance companies' asset allocation. Furthermore, benefiting from the optimization of policy environment for high-quality development, equity investments are expected to further contribute to performance with the implementation and effectiveness of a series of growth-stabilizing policies. In terms of performance, the stock market is expected to improve under the resonance of policies, macroeconomic trends, and a relatively loose liquidity environment, subsequently driving improvements in total investment returns and profits of insurance companies. In addition, the limited potential for further downward movement in long-term interest rates is expected, and if the macroeconomic recovery exceeds expectations, long-term interest rates are also likely to rise. It is recommended to continue monitoring these trends.