Soochow: U.S. stocks violent rebound to new highs, what is the future direction of Hong Kong stocks?

Soochow Institute's overseas team released a research report stating that the US stock market saw a 13-day streak of gains, while the rebound in the Hong Kong stock market was relatively weak in comparison. This week, the ceasefire between the US and Iran is set to expire, earnings reports from US tech giants are looming, and the confirmation hearing for Federal Reserve Chair Powell's nomination is creating market volatility. Geopolitical factors and tech earnings reports from overseas will significantly impact the pace of the Hong Kong stock market. The situation in the Strait of Hormuz remains uncertain. During the fragile ceasefire between the US and Iran, the US side has been using blockade measures against Iran, leading overseas investors to believe that Trump's position is gaining strength and easing tensions between the US and Iran. After Iran announced the reopening of the strait on the 17th, they reversed course on the 18th and closed it again. The ceasefire agreement between the US and Iran expires on the 22nd, and the uncertainty surrounding whether both sides can quickly reach an agreement will continue to affect fund flows. Soochow stated that as the earnings reports from US tech giants approach, the global discussion will return to the fundamentals of tech companies, with investment return rates still being a key consideration. If US tech earnings exceed expectations, it could boost market confidence; otherwise, the impact on the Hong Kong stock market will be significant. Following the performance of ASML and TSM after their earnings release last week, this week's overseas tech giants' earnings reports will still need to be observed. At this stage, the recommended strategy for Hong Kong stocks is to continue to hold value and dividend stocks as the base, with upstream AI hardware being the anchor of value. However, it is likely to be affected by overseas developments in the near future, and some phase-wise profit-taking may be necessary. Furthermore, it is still recommended to focus on Chinese global scarce assets such as new energy and innovative pharmaceuticals. Last week's review (2026/4/13-4/17): Major global markets generally strengthened, with the Nasdaq Composite Index, South Korea Composite Index, and S&P 500 leading the way, while the UK FTSE 100 saw the smallest gains. All Hong Kong stocks rose, with the Hang Seng Technology Index up by 3.8%, the Hang Seng Index up by 1.0%, and the Hang Seng H-Share Index ETF up by 2.2%. In terms of industries, non-essential consumption (+4.4%), healthcare (+2.0%), and information technology (+2.1%) led the gains, while necessary consumption (-3.1%) lagged behind. Last week saw a rebound in the Hong Kong stock market. After the substantial decrease in geopolitical risks towards the end of the conflicts, the market further strengthened. Geopolitically, although the negotiations between the US and Iran have been wavering, Trump's repeated signals of easing tensions by stating that "war is close to ending" have boosted the market. During the temporary ceasefire, on April 16th local time, the US announced the start of "maximum pressure" economic sanctions against Iran and threatened to blockade the Strait of Hormuz, but the likelihood of escalation decreased significantly. In terms of industries, the Hong Kong tech sector benefited from the large rebound in overseas tech, quickly recovering; at the same time, the healthcare sector saw gains, mainly due to the release of new regulations optimizing drug pricing mechanisms by regulatory agencies. There was a net inflow of Southbound funds last week, with a net inflow of 25.7 billion Hong Kong dollars, an increase of 37.5 billion Hong Kong dollars compared to the previous week. Southbound trading accounted for 42% of all Hong Kong stock trading, down from 46% the previous week. In terms of industries, there was a net inflow in information technology, healthcare, and materials, and a net outflow in energy, financials, and consumer goods. In terms of individual stocks, the top net buyers were POP MART, China Life Insurance, and XIAOMI-W. Last week, mainland China ETFs investing in Hong Kong and QDII saw a net inflow. The total size increased to 428.98 billion yuan, an increase of 7.1 billion yuan. Among them, Hong Kong ETFs saw a net inflow of 1.59 billion yuan, while QDII ETFs saw a net outflow of 1.39 billion yuan. Net outflow industries included health care. Last week, Hong Kong stocks saw buybacks of 3.2 billion Hong Kong dollars, a decrease of 0.4 billion Hong Kong dollars from the previous week; IPOs amounted to 8.2 billion Hong Kong dollars, an increase of 8.2 billion Hong Kong dollars from the previous week; and the market value of unlockings was 11.2 billion Hong Kong dollars, a decrease of 5.2 billion Hong Kong dollars from the previous week.