HK Stock Market Move | The major financial sector fell in the morning session, with improved liquidity driving the rise in the financial sector before. The market is watching whether the monetary authority will tighten the liquidity of the Hong Kong dollar.

In the early trading session, the large financial sector declined, with domestic banks, domestic insurers, and Chinese brokerage firms all under pressure. As of the time of writing, EB SECURITIES (06178) fell by 4.78% to HK$6.78; CMSC (06099) fell by 4.78% to HK$4.5, reported at HK$11.46; China Construction Bank Corporation (00939) fell by 3.13% to HK$6.82; China Life Insurance (02628) fell by 3.38% to HK$15.44. In terms of news, since May, the Hong Kong dollar has been rapidly fluctuating. In early May, the Hong Kong dollar's exchange rate against the US dollar triggered consecutive strong-side exchange guarantees, prompting intervention by the Hong Kong Monetary Authority; starting from May 5th, the Hong Kong dollar's exchange rate against the US dollar quickly declined and gradually approached the weak-side exchange guarantee level. Huatai pointed out that discussions in the market about improving liquidity are still ongoing, and the potential appreciation of the Renminbi seems to continue to attract funds into Hong Kong stocks and drive the financial sector up. HAITONG INT'L released a Hong Kong strategy report stating that the Hong Kong Interbank Offered Rate (HIBOR) is still hovering at a low level, but carry trade transactions continue to push the USD/HKD exchange rate up to 7.84, reaching 7.844 at one point, further approaching the weak-side exchange guarantee of 7.85. It will be necessary to monitor whether the Hong Kong Monetary Authority will begin orderly tightening of Hong Kong dollar liquidity. Morgan Stanley also stated that in the coming months, the Hong Kong dollar interbank offer rate may rebound from the recent decline, as some excess liquidity in the market may be reabsorbed.