Commentary

Momentum Stalled but Rotation Persists; Tech And Real Estate Chains Lead the Rally

CSI 300 down 0.3% The trend in the A-share market has shifted to “stalled momentum.” Overall indices were weak this week, presenting a pattern of “lackluster upward attacks and sustained sector rotation.” The SSE Index(000001) fell 0.54% for the week, dropping below its 5, 10, and 20-day moving averages (MA),

Hk Stocks Close Lower Amid Volatility; Security Hardware Sector Surges Against the Trend

Hang Seng Index down 1.37% The Hong Kong stock market showed a volatile adjustment this week. Although the easing of Sino-US relations provided positive support, the surge in US Treasury yields and the pullback in the A-share market exerted significant pressure on HK stock sentiment. As of Friday’s close, the

Divergence Intensifies Amid Heavy Volume Pullback; Technology Sector Leads the Rally

CSI 300 down 0.25% A-shares maintain an “uptrend,” but major indices shifted into high-level volatile pullbacks this week, presenting a state of “adjustment with heavy volume and structural divergence.” The SSE Index(000001) fell 1.07% this week, dropping below the 5/10-day moving averages (MA), yet remaining above the 20/50/200-day MAs, leaving

Hk Stocks Volatile With Pullback; Ai Theme Continues

HSI down 1.63% The Hong Kong stock market showed a trend of surging early in the week followed by a pullback, with the easing of China-US relations and fluctuating US inflation data becoming the main factors affecting market sentiment. As of Friday’s close, the Hang Seng Index(HSI) fell 1.63% for

Geopolitical De-Escalation Catalyzed a Rebound in Hong Kong Tech Stocks

Hang Seng Index rose 2.39% The Hong Kong stock market showed a significant rebound this week, with technology stocks leading the rally to repair valuations. As of Friday’s close, the Hang Seng Index(HSI) rose 2.39% for the week; the Hang Seng TECH Index(HSTECH) performed even stronger, with a weekly gain

Volume Increased As Prices Rose, Approaching Previous Highs; Tech Sector Rotation Broadened

CSI 300 rose 1.34% A-shares maintained an “uptrend.” Major indices rose this week, accompanied by increased volume, showing a rhythm of “trend strengthening + approaching previous highs.” The SSE Index(000001) rose +1.65% this week, remaining only about -0.41% from its 1-year high. It is still trading above its 5/10/20/50/200-day moving averages, indicating a healthier upward structure. On the volume front, the last day’s trading volume was approximately +7.74% higher than the 50-day average, showing that capital participation is increasing ahead of a breakout of the previous high zone. The CSI 300(000300) rose +1.34% for the week, hitting a yearly high, and remains about -0.61% from its 1-year high. It is also trading above its 5/10/20/50/200-day moving averages, with the last day’s volume approximately +4.17% higher than the 50-day average, suggesting the momentum in heavyweight stocks is more sustainable. The growth side was stronger: the Shenzhen Index(399001) rose +3.02% for the week to hit a yearly high, and the ChiNext(399006) rose +3.24% for the week to hit a yearly high. Both saw last-day volumes significantly higher than their 50-day averages, indicating that rising risk appetite is more noticeably driving leadership in high-elasticity directions. Regarding Hong Kong stocks, the Hang Seng Index(HSI) rose 2.39% for the week. Although volume increased slightly by 1.95% compared to the 50-day average, it remains at a low level, indicating cautious market sentiment and reflecting more of a follow-up repair. Regarding US stocks, the Nasdaq Composite(0NDQC) rose +2.75% for the week to hit a yearly high; the S & P 500 Index(0S&P5) rose +1.48% for the week to hit a yearly high. Looking at US data, the economy is in a state of “moderate expansion but with lingering reflation risks,” and policy orientation is more cautious. The April ISM Manufacturing PMI was 52.7, flat with the previous value and slightly below the expected 53, indicating that manufacturing is still in expansion territory but momentum is no longer rising. ADP non-farm employment change added 109,000 jobs, higher than the expected 99,000 and significantly stronger than the previous 61,000. Coupled with initial jobless claims of 200,000 (lower than the expected 205,000), the labor market remains tight. This combination of “resilient growth + employment resilience” raises the threshold for the Federal Reserve to cut rates too quickly. Meanwhile, EIA crude oil inventories continued to draw down (-2.313 million barrels). Although this was less than the expected -3.291 million and the previous -6.234 million, it still points to tight supply and demand. The New York Fed survey shows long-term inflation expectations are stable, but oil price shocks will exacerbate distributional pressures. Adding to this are the US-Iran conflict and risk spillovers from Hormuz and Malacca. Disruptions in energy and shipping can easily transmit inflation from the “commodity end” back to “service-side expectations,” causing a market divergence where “equities are optimistic, but bonds are more sensitive to inflation”: risk assets are betting on a soft landing, while the bond market is pricing in higher rates for longer. Europe and Japan show different focuses regarding AI and interest rates: The EU has legislated to explicitly ban AI applications such as “deepnude,” reflecting a regulatory path of “establishing rules before development.” Japan’s consecutive growth in real wages has strengthened interest rate hike expectations, implying that interest rate divergence among major global economies may continue. Under the combined effect of high USD interest rates and geopolitical risks, capital is more inclined to “look for certainty and margin of safety.” The main theme of domestic policy is “stabilizing capital, stabilizing expectations, shoring up weaknesses, and strengthening security.” On the monetary front, the net withdrawal scale of 3-month outright reverse repos hit a阶段性 high, but reports indicate the liquidity situation is gradually returning to “neutral to loose.” This implies that, without engaging in “flood-like stimulus,” liquidity management focuses more on smoothing volatility and providing structural support. Regarding hedging against external shocks, foreign exchange reserves rebounded to $3.41 trillion in April, an increase of approximately $68.4 billion for the month. The central bank has increased gold holdings for 18 consecutive months, which helps improve the diversification of reserve assets and enhance resilience against external financial and geopolitical disturbances. On the exchange rate front, the offshore RMB broke through 6.8 to hit a multi-year high, reflecting a market reassessment of domestic fundamentals, policy continuity, and the external USD cycle. In a global environment of “strong USD + high volatility,” stabilizing the exchange rate relies more on fundamental improvement and stable cross-border payments rather than single short-term tools. In terms of industry and governance: First, the domestic substitution of semiconductors continues to “tackle the hard bones,” corresponding to enhancing autonomy and controllability in key links against the backdrop of external technological restrictions and public opinion warfare. Second, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Assessment Measures for the Effectiveness of Beautiful China Construction,” turning green transformation from a slogan into quantifiable constraints and incentives through assessment. Third, China and the US are considering launching official AI discussions, alongside new domestic compliance regulations for commercial SMS, reflecting a policy mix of “developing AI while managing risks, and maintaining open communication while holding the bottom line.” At the sector level, this week showed a combination of “Software Services Outsourcing – Data Storage – Housing Services.” Comml Svcs-Outsourcing(G1001IG.CN) rose approximately 12.09% for the week. Driven by the promotion of “AI + Software,” corporate cost reduction and efficiency increase, and expectations of rising outsourcing penetration, it is more likely to attract trend-following capital. However, the short term requires sustained volume and order fulfillment to confirm the rally is not merely emotional. Computer-Data Storage(G3578IG.CN) rose approximately 11.28% for the week. Capital concentration is high and related to the logic of AI computing power chain expansion, but it retreated on the day, showing increased divergence after a rapid rise. It leans more towards strong consolidation, making it suitable to wait for support after a pullback or track it upon another volume breakout. Bldg-Maintenance & Svc(G7340IG.CN) rose approximately 10.03% for the week. It leans towards the logic of existing housing and property service repair, supported more by expectations of stabilizing real estate and urban renewal, playing a certain “style balancing” role as the market approaches previous highs. Regarding individual stocks and portfolios, the Top 33 rose an average of +3.88% this week, with 24 rising and 9 falling; the profit-making effect has obviously rebounded. The leading gainer was Shenzhen Longsys Electronics(301308), with a weekly gain of 19.66%, an O’Neil Score of 67, an RS Rating of 99, an EPS Rating of 81, an Acc/Dis Rating of A+, and an Industry Rating of 4. Against the backdrop of industry strength being in the forefront, strong individual stocks are more likely to receive a boost from industry trends. However, during rapid upward phases, attention must still be paid to volume continuity and the quality of support during pullbacks to avoid profit retracement caused by high-level volatility. In the “uptrend” phase, attention and stock selection density can continue to increase. However, as multiple indices approach previous highs and volatility may amplify, position building is better synchronized with volume breakouts and leadership diffusion, avoiding chasing highs during low-volume rallies and thematic rotations. Operationally, priority should be given to leaders in Industry Strength Rankings 1–40 with verifiable fundamentals, an Acc/Dis Rating no lower than C, and healthy technical patterns. What do you think? Please email us any questions or comments. Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.