EB Securities, Wu Lixin: Market Focus on China-U.S. Summit Meeting, CSI Expected to Refresh Highs During the Year

The market is currently waiting for developments in the US-China trade negotiations and the meeting between the leaders of both countries this week. EB SECURITIES International strategist Wu Lixian pointed out that the outcome of the meeting between the two leaders will have a significant impact on the market. It is expected that the Hang Seng Index will have strong support at the 25200 level, and if there continues to be good news, the index may even reach a new high for the year. Wu Lixian pointed out that current events are limiting the direction of the market, causing it to adopt a wait-and-see attitude, which has led to low trading volume recently. It is anticipated that after the negotiation results are announced, the market will have a clear direction and establish a trend, becoming a key factor in the performance of the Hong Kong stock market in November. He also estimated that under the current circumstances, both parties will reach some degree of agreement, but it will take time to resolve all issues between China and the US. It is expected that the Hang Seng Index will have strong support at the 25200 level, and if there continues to be good news, the index may reach a new high for the year. He stated that in April, the US attempted to significantly increase tariffs, ultimately affecting the direction of US dollar assets. At that time, the Federal Reserve had not yet cut interest rates, but is currently in a phase of consecutive interest rate cuts. Therefore, it is expected that the authorities will not hastily increase tariffs to raise domestic inflation. The Federal Reserve will also hold a monetary policy meeting this week, but Wu Lixian pointed out that the market has already largely factored in the interest rate cuts. Although investors are hopeful that Hong Kong may also follow the US in cutting interest rates this week, it may not necessarily help the Hong Kong stock market much. The movement of the Hang Seng Index ultimately still depends on the progress of the US-China negotiations, and there may not be significant volatility in the short-term index and trading volume. In terms of sectors, he recommends investing in high dividend stocks at this time, specifically Chinese telecommunications stocks with growth prospects, as well as oil stocks that have been consistently followed by Northbound investors. For investors looking to invest in technology stocks, he believes that it may be wise to wait for the results of the US-China negotiations before making any moves.