On August 25, the three major Hong Kong stock indices opened higher collectively, with the Hang Seng Index up 1.06% at open and the Hang Seng Tech Index up 1.49%. After opening, the largest A-share ETF in the same track, the Hang Seng Tech Index ETF (513180), surged over 2.5% at one point. Among its holdings, NIO, SMIC, Kingdee International, Baidu Group, and Alibaba led the gains, with NIO soaring over 14% at one point.
On the news front, Fed Chair Powell delivered a speech titled "Monetary Policy and the Federal Reserve's Review Framework" at the Jackson Hole symposium, adopting a dovish stance. He emphasized the downside risks faced by the job market under the fragile balance of weakening supply and demand, signaling a potential rate cut in September. Powell also unveiled the Fed's revised monetary policy framework, which largely met market expectations. The revisions primarily included reducing focus on the zero lower bound, returning to a flexible inflation targeting regime, adjusting how monetary policy responds to maximum employment, and emphasizing a more balanced strategy to advance the dual goals of inflation and employment.
Powell's rare dovish tone has significantly revived expectations of a Fed rate cut, with overseas liquidity expected to continue improving. As of writing, the CME FedWatch Tool shows an over 85% probability of a 25-basis-point rate cut at the September meeting. Against this backdrop, the Hong Kong stock market, especially the tech sector, is poised to benefit significantly. Currently, the Hang Seng Tech Index remains in a historically relatively undervalued range. It is more sensitive to shifts in the China-U.S. interest rate differential, allowing it to deeply benefit from a looser overseas liquidity environment. Additionally, the Hang Seng Tech Index is characterized by high volatility and high growth, meaning its upward momentum could be stronger once market conditions improve. Investors without a Hong Kong Stock Connect account may consider using the Hang Seng Tech Index ETF (513180) to gain one-click exposure to China's core AI assets.
