A-share market resumption after the long Spring Festival holiday has been positive. On the first trading day of the Year of the Dragon, the red market opened higher and moved higher. The Shanghai Composite Index closed up 44 points or 1.6%; the Shenzhen Component Index rose 0.9%. However, the Hong Kong stock market retreated after rising for three days in a row. The Hang Seng Index retested the 50-day moving average (16,141 points) and consolidated. The trading volume increased due to the return of the North Water. The Hang Seng Index opened 5 points lower this morning at 16,334 points, which was already the day's high. Later, the decline expanded. The Hang Seng Index fell by as much as 201 points in the afternoon, reaching a day low of 16,137 points, and it remained at the 50-day moving average level. The Hang Seng Index closed down 184 points, or 1.1%, at 16,155 points, the China National Index fell 73 points, or 1.3%, at 5,484 points, and the KCI fell 89 points, or 2.7%, at 3,253 points. The market's turnover for the whole day was 82 billion yuan. Domestic demand stocks generally retreated, with China Duty Free (1880) falling 10%, Li Ning (2331) falling 8.6%, the worst performing blue chip, Jiu Maojiu (9922) and Master Kong (322) falling about 6%. In addition, the China Index Institute said that the average daily transaction area of ​​new homes during the Spring Festival holiday fell by about 27% year-on-year. China real estate stocks Longfor (960) and Yuexiu Real Estate (123) plunged by more than 50%.

Although A shares rose after the market resumed today, due to the good performance of the Hang Seng Index last week, it is normal to record a retreat after rising for three consecutive days. The Hang Seng Index faced a lot of resistance at 16,500 points. It peaked and fell today, temporarily showing a double top. form, and then adjust and solidify. In addition, even if there is a short-term adjustment in the U.S. stock market, it will not have a big impact on Hong Kong stocks, and Hong Kong stocks have not followed the rise of U.S. stocks earlier. Unless there is a stock market crash-like decline in U.S. stocks, generally speaking, the trend of U.S. stocks has limited reference value for Hong Kong stocks, and Hong Kong stocks are still more affected. The trend of A shares is about to change. This year is an election year. During the election year in the United States, Democratic and Republican candidates will play more China cards. Therefore, the market situation may be more volatile. Investors are advised to avoid stocks affected by technology wars, trade wars, and drug wars. Relatively speaking, Chinese telecommunications stocks such as China Mobile (941) and resource stocks such as Shenhua (1088) are relatively stable because they are less affected by Sino-US factors and have high dividend yields.

I am a person licensed by the Securities Regulatory Commission and do not hold the above shares.

Zhang Zhiwei

Co-director

Prudential Brokerage LimitedPrudential Brokerage Limited