[ET Net News Agency, 26 June 2026] The US May PCE Price Index increased by 4.1% year-on-year, marking the largest increase since April 2023, yet it aligned with market expectations. High inflation data continues to support expectations for interest rate hikes. Asia-Pacific stock markets pointed downwards across the board, with the Korea stock market plunging by 8%, and the Japan and Taiwan stock markets falling by over 3%. After the HSI opened more than a hundred points lower, the index moved progressively downwards, slumping by more than 500 points at its lowest during the session. It closed the half-day session at 22,644, down 432 points or 1.9%, with main board turnover exceeding HKD 183.4 billion. The Hang Seng China Enterprises Index stood at 7,450, down 158 points or 2.1%. The Hang Seng Tech Index stood at 4,259, down 146 points or 3.3%.
"Lee Wai Kit: Multiple negative factors caused the broader market to slide, with hopes pinned on the end of short positions for a Hong Kong stock rebound"
Since showing slight signs of improvement last Monday, the HSI quickly lost momentum, and the index has been continuously sliding. Up until today, the broader market has recorded nine consecutive negative candlesticks, even aggressively breaking below the technical support level of 23,000 points to hit a one-year low.
Lee Wai Kit, a financial commentator of TF International, told ET Net News Agency that the recent weakness in Hong Kong stocks is mainly due to a double blow of various negative news affecting every sector. For instance, earlier on, multiple e-commerce platforms were summoned for regulatory talks, and Mainland China cracked down on illegal cross-border investments. Furthermore, "southbound capital" visibly reducing its holdings in heavyweight blue-chip stocks is also a key factor dragging down the HSI. Lee Wai Kit pointed out that the net inflow of southbound capital this year is noticeably inferior to that of last year, and operations have been primarily focused on short-term speculation, lacking long-term directional guidance. Observations show that southbound capital has mainly sold off heavyweight platform stocks and rotated into recently popular chip, storage, and semiconductor shares, reflecting that the overall market still maintains a style of "trading individual stocks rather than the broader market".
In addition, external news has also brought pressure. The US Department of Commerce previously announced the latest inflation data, and Federal Reserve officials also stated that inflationary pressures still exist, which has more or less affected the performance of Hong Kong stocks. However, oil prices, which had driven inflation higher, have recently eased due to cooling US-Iran relations, returning nearly to pre-war levels. Lee Wai Kit expects that while US labour and inflation data will remain relatively strong in the coming one to two months, and the World Cup tournament might also relatively push up prices, the inflation data is expected to fall back by the fourth quarter, and the inflationary pressure in the US will slowly ease in the second half of the year.
Looking ahead at the market's future outlook, Lee Wai Kit pointed out that the HSI has now broken below most technical support levels, and there are still no clear signs of a rebound. He expects the broader market will have to fall to around 22,400 points before triggering a bear market signal, but this will simultaneously stimulate the market's desire to "bet on a rebound". He also noted that investors can pin their hopes on the end of short positions for the new quarter and the new month; or wait until after the half-year end, when fund managers might improve their views on platform stocks upon reopening positions, at which point the trend of Hong Kong stocks can hopefully usher in a genuine rebound.
"Mainland China banks named, market needs time to digest, long-term dividend investors need not rush to sell"
Amidst the sluggish atmosphere of the broader market, the Mainland China bank sector also welcomed bad news. The National Audit Office of Mainland China recently released a work report directly naming seven financial institutions, revealing that a total of over 260 cases of major violations of discipline and law were discovered and transferred, involving funds of over RMB 91 billion. As soon as the news came out, large-scale Mainland China bank stocks fell across the board, leaving the market in a sea of red.
Lee Wai Kit believes that this round of auditing storm represents a short-to-medium-term shock. Although future rectifications and compliance arrangements will directly affect the performance of the relevant shares, Mainland China bank stocks have solid fundamentals and have always been regarded as a clear stream in the stock market. Along with the end of the adjustment period and the market gradually digested the relevant news, when valuations fall back to attractive levels, the market will definitely regain confidence. Therefore, the current decline is only temporary, and it is recommended that investors closely monitor subsequent developments.
Regarding different investment strategies, Lee Wai Kit suggested that investors holding Mainland China bank stocks long-term for dividend purposes need not rush to sell their shares because of this. However, for short-term speculators, given that negative news is currently dominating market sentiment, short-term shareholders should first reduce their holdings and maintain a wait-and-see stance. He added that investors interested in deploying capital into Mainland China bank stocks can quietly wait for the storm to fade, and focus their attention on the performance of CCB (00939) and ICBC (01398), expecting that the defensive capabilities of the relevant shares will rebound by then.
"Lee Wai Kit: Multiple negative factors caused the broader market to slide, with hopes pinned on the end of short positions for a Hong Kong stock rebound"
Since showing slight signs of improvement last Monday, the HSI quickly lost momentum, and the index has been continuously sliding. Up until today, the broader market has recorded nine consecutive negative candlesticks, even aggressively breaking below the technical support level of 23,000 points to hit a one-year low.
Lee Wai Kit, a financial commentator of TF International, told ET Net News Agency that the recent weakness in Hong Kong stocks is mainly due to a double blow of various negative news affecting every sector. For instance, earlier on, multiple e-commerce platforms were summoned for regulatory talks, and Mainland China cracked down on illegal cross-border investments. Furthermore, "southbound capital" visibly reducing its holdings in heavyweight blue-chip stocks is also a key factor dragging down the HSI. Lee Wai Kit pointed out that the net inflow of southbound capital this year is noticeably inferior to that of last year, and operations have been primarily focused on short-term speculation, lacking long-term directional guidance. Observations show that southbound capital has mainly sold off heavyweight platform stocks and rotated into recently popular chip, storage, and semiconductor shares, reflecting that the overall market still maintains a style of "trading individual stocks rather than the broader market".
In addition, external news has also brought pressure. The US Department of Commerce previously announced the latest inflation data, and Federal Reserve officials also stated that inflationary pressures still exist, which has more or less affected the performance of Hong Kong stocks. However, oil prices, which had driven inflation higher, have recently eased due to cooling US-Iran relations, returning nearly to pre-war levels. Lee Wai Kit expects that while US labour and inflation data will remain relatively strong in the coming one to two months, and the World Cup tournament might also relatively push up prices, the inflation data is expected to fall back by the fourth quarter, and the inflationary pressure in the US will slowly ease in the second half of the year.
Looking ahead at the market's future outlook, Lee Wai Kit pointed out that the HSI has now broken below most technical support levels, and there are still no clear signs of a rebound. He expects the broader market will have to fall to around 22,400 points before triggering a bear market signal, but this will simultaneously stimulate the market's desire to "bet on a rebound". He also noted that investors can pin their hopes on the end of short positions for the new quarter and the new month; or wait until after the half-year end, when fund managers might improve their views on platform stocks upon reopening positions, at which point the trend of Hong Kong stocks can hopefully usher in a genuine rebound.
"Mainland China banks named, market needs time to digest, long-term dividend investors need not rush to sell"
Amidst the sluggish atmosphere of the broader market, the Mainland China bank sector also welcomed bad news. The National Audit Office of Mainland China recently released a work report directly naming seven financial institutions, revealing that a total of over 260 cases of major violations of discipline and law were discovered and transferred, involving funds of over RMB 91 billion. As soon as the news came out, large-scale Mainland China bank stocks fell across the board, leaving the market in a sea of red.
Lee Wai Kit believes that this round of auditing storm represents a short-to-medium-term shock. Although future rectifications and compliance arrangements will directly affect the performance of the relevant shares, Mainland China bank stocks have solid fundamentals and have always been regarded as a clear stream in the stock market. Along with the end of the adjustment period and the market gradually digested the relevant news, when valuations fall back to attractive levels, the market will definitely regain confidence. Therefore, the current decline is only temporary, and it is recommended that investors closely monitor subsequent developments.
Regarding different investment strategies, Lee Wai Kit suggested that investors holding Mainland China bank stocks long-term for dividend purposes need not rush to sell their shares because of this. However, for short-term speculators, given that negative news is currently dominating market sentiment, short-term shareholders should first reduce their holdings and maintain a wait-and-see stance. He added that investors interested in deploying capital into Mainland China bank stocks can quietly wait for the storm to fade, and focus their attention on the performance of CCB (00939) and ICBC (01398), expecting that the defensive capabilities of the relevant shares will rebound by then.
