[ET Net News Agency, 03 November 2025] Recently, China and the US announced further
details of their trade agreements, gradually dispelling the shadow of the trade war.
Meanwhile, the US dollar continued to strengthen, with the Dollar Index hitting a
three-month high and approaching the 100 level. After three consecutive days of losses,
the Hang Seng Index opened nearly 100 points higher this morning but saw a volatile
session. Weakness in A-shares early on narrowed the HSI's gains to just 13 points at one
stage. The Shanghai Composite later recovered, helping the HSI regain momentum and close
the morning session at 26,057, up 150 points or 0.6%, with main board turnover exceeding
HKD 132.1 billion. The Hang Seng China Enterprises Index stood at 9,231, up 62 points or
0.7%. The Hang Seng Tech Index closed at 5,893, down 14 points or 0.2%.

"Mak Ka Ka: Powell's "calibration" effective in slowing fund flows, funds lack incentive
to add exposure, capping HSI upside"

US Federal Reserve Chair Jerome Powell, after delivering two rate cuts as the market had
hoped, quickly adopted a hawkish tone, noting that US inflation remains under upward
pressure in the near term and that there is significant disagreement within the committee
on whether to cut rates again in December. The hawkish shift weighed on Hong Kong stocks
last Friday, with the HSI slipping below 26,000. After the weekend, the HSI saw some
rebound momentum this morning but remained range-bound around the 26,000 level. Mak Ka Ka,
Head of Financial Products Trading and Research Department of SinoPac Securities (Asia),
told ET Net News Agency that Powell's recalibration of rate cut expectations has clearly
turned global capital more defensive. The HSI's consolidation around 26,000 has weakened
its medium-term upward momentum, with initial resistance at 26,500, roughly the 0.618
Fibonacci retracement of the previous fall from last month's high to 25,100.
Although expectations for further rate cuts have diminished, CME FedWatch still shows a
nearly 70% chance of a 25bps cut in December. Mak remains cautious on the HSI's
medium-term outlook, noting that while the probability of rate cuts has declined, it is
still relatively high overall. However, with China's 15th Five-Year Plan already announced
and US-China relations easing, many large funds have already delivered satisfactory
returns this year. As a result, there is little incentive for major funds to significantly
increase their positions for the remainder of the year, limiting further upside. Mak
expects the market to remain in a consolidation phase, with the chances of setting new
highs for the year much reduced.

"OPEC+ pause in output but oil prices won't rise, but oil stocks await pullback for better
entry"

OPEC has announced a modest increase in output quotas for December, up by 137,000
barrels per day, the same as in October and November, but will pause any further increases
from January to March 2026 due to seasonal factors. Oil prices remained steady, but Hong
Kong-listed oil majors rallied in anticipation of the supply freeze, with CNOOC (00883)
rising over 4% in the morning session. Mak noted that the recent strength in the "three
oil majors" has been notable, and OPEC's decision to pause output hikes is expected to
provide further short-term support for oil stocks. However, given ongoing global economic
uncertainties, there are few catalysts for a significant rise in oil prices, and the
upside for the oil majors will likely be limited during this period.
Mak expects CNOOC to face resistance before retesting last year's (ex-dividend) record
high of HKD 21.77. She holds a neutral view at current prices and suggests investors wait
for a pullback to around HKD 19.5 for a better risk-reward entry. As for Sinopec (00386),
which has lagged its peers, Mak believes that with limited upside in oil prices, Sinopec
is also unlikely to see substantial gains in the short term.