The liquidity of the Hong Kong stock market is receiving dual support from both domestic and international sources.

Internationally, the trend of the US Dollar Index has a significant impact on the Hong Kong stock market. Historical data shows that the Hang Seng Index has a clear negative correlation with the US Dollar Index. When the US dollar weakens, international capital tends to flow into emerging markets such as Hong Kong stocks.

Interest rate cuts may resume in September. Since August, the Trump administration has been continuously pressuring the Federal Reserve to implement substantial rate cuts, demanding a direct reduction of the federal funds rate by 300 basis points to alleviate fiscal pressure, while also attempting to undermine the Fed's independence through personnel adjustments. The market expects the Federal Reserve to implement two more rate cuts in 2025. Historically, Hong Kong stocks have performed well during the Fed's preventive rate-cutting cycles. Therefore, against the backdrop of the ongoing rate-cutting cycle, the Hong Kong stock market is attracting increasing attention from global allocation funds.

From the perspective of domestic capital, southbound funds have become a "stabilizer" for the Hong Kong stock market. Since the beginning of the year, southbound funds have accumulated a net inflow of over HKD 1 trillion, with technology sectors such as commerce and retail (including e-commerce), communications, electronics, media, and computers receiving the highest net inflows. This trend stems from both continued policy support for technological innovation domestically and the recovery of global technology sector sentiment, such as in AI. The "joint efforts" of domestic and foreign capital have provided solid liquidity support for the technology sector of the Hong Kong stock market.

【Hong Kong Stock Technology-Related ETFs】

Full Tech Industry Chain—Hong Kong Stock Connect Tech ETF (159101)

Internet Leaders—Hang Seng Internet ETF (513330)