The Zhitong Finance App learned that Hong Kong stocks fell under pressure throughout the day. The Hang Seng Index fell below the 19,000 mark, and the Hang Ke Index fell close to 3% at the end of the session. At the close, the Hang Seng Index fell 1.7% or 326.89 points to 18868.71 points, with a full-day turnover of HK$129.935 billion; the Hang Seng State-owned Enterprises Index fell 1.7% to 6701.78 points; and the Hang Seng Technology Index fell 2.41% to 3896.19 points.

Cinda International pointed out that the last mile of the US fight against inflation is repeated, and the game between the market and the Federal Reserve over interest rate cuts and downsizing will increase market fluctuations. The market expects the mainland to introduce strong stimulus policies to enhance economic momentum and speed up the return of capital to the Chinese and Hong Kong stock markets. The short-term resistance of the Hang Seng Index refers to 20,000 points, which corresponds to a predicted price-earnings ratio of about 10 times.

Blue chip stock performance

Alibaba-SW (09988) is under significant pressure. At the close, it fell 5.24% to HK$78.65, with a turnover of HK$7.942 billion, dragging down the Hang Seng Index by 77.35 points. According to media reports, people familiar with the matter said that Alibaba is considering issuing convertible bonds and plans to raise about 5 billion US dollars in capital. People familiar with the matter said that Alibaba has already negotiated with the investment bank to issue bonds that can be converted into US listed shares. People familiar with the matter said the move was aimed at funding share buybacks and growth. People familiar with the matter said it may be released as early as this week, but no final decision has yet been made.

In terms of other blue-chip stocks, CNOOC (00883) rose 0.74% to HK$19.18, contributing 3.43 points to the Hang Seng Index; China Shenhua (01088) rose 0.55% to HK$36.65, contributing 1.06 points to the Hang Seng Index; Zhongsheng Holdings (00881) fell 4.64% to HK$15.22, dragging down 0.98 points; Ideal Automobile-W (02015) fell 4.01% to HK$78.9, dragging down the Hang Seng Index by 7.17 points.

In terms of popular sectors

On the market, large technology stocks generally declined. It was rumored that Alibaba issued 5 billion US dollars of convertible bonds. Alibaba once fell more than 6% at the end of the session and bucked the trend and closed up nearly 2% after a quick performance; the Federal Reserve's hawkish statement was negative; non-ferrous metals stocks had the highest declines; domestic housing stocks, property management stocks, paper stocks, automobile stocks, aviation stocks, and large financial stocks weakened. On the other side, many petty stocks surged; China's Shuta closed up 66.67%; ITE HOLDINGS closed up more than 58%; in addition, some oil stocks and coal stocks bucked the trend.

1. Non-ferrous metals stocks had the highest declines. At the close, Ganfeng Lithium (01772) fell 7.39% to HK$23.8; Lingbao Gold (03330) fell 6.76% to HK$3.17; Jiangxi Copper (00358) fell 3.6% to HK$17.16; and China Aluminum (02600) fell 2.66% to HK$5.48.

The latest minutes of the Federal Reserve meeting show that Federal Reserve officials need to continue to wait and see the inflation data in order to be more confident that inflation will fall to the target. After the minutes of the meeting were released, traders reduced their bets that the Federal Reserve would cut interest rates more than once this year. The hawkish statement was negative for metals, and futures prices for metals such as gold, silver, copper, nickel, aluminum, and zinc fell across the board.

Guomao Futures pointed out that recently, many Federal Reserve officials have made hawkish remarks. Expectations of the Fed's interest rate cuts have been repeated, and the colored sector is operating at a high level. On the domestic side, the main economic data for April showed a pattern of strong supply and weak demand. Industrial growth recovered clearly, but fixed asset investment declined across the board, and real estate investment was still the main drag. A number of real estate stimulus policies have recently been introduced, and the subsequent policy side is still expected to gain further strength.

2. Domestic housing stocks collectively declined. At the close, Shimao Group (00813) fell 7.14% to HK$1.17; Sunac China (01918) fell 6.9% to HK$1.62; R&F Properties (02777) fell 4.31% to HK$1.11; and Vanke Enterprise (02202) fell 2.85% to HK$6.82.

Since the central bank's new mortgage policy was announced on May 17, many places have implemented relevant policies one after another. Zhang Dawei, chief analyst at Central Plains Real Estate, believes that there are many major policies introduced by the supervisory authorities, but currently only the national Provident Fund policy has been implemented to cut interest rates. As far as the market is concerned, it is still necessary to wait for rules on how to implement several other policies in various regions, so it is expected that the impact of the policies will gradually become apparent in the market after this week. CICC said that considering that there will be a certain time lag and uncertainty from the release of the policy until the fundamentals come into effect, the market may also experience a phased correction as the cumulative increase gradually expands. A period of observation on the effects of the policy followed.

3. Auto stocks weakened across the board. At the close, Xiaopeng Motor-W (09868) fell 5.34% to HK$32.8; Ideal Automobile-W (02015) fell 4.01% to HK$78.9; and Great Wall Motor (02333) fell 1.41% to HK$13.96.

In the early morning of May 22, EST (evening of May 22, Beijing time), the Office of the United States Trade Representative (USTR) announced draft rules for Huaxin's 301 tariffs, further refining the categories of products to be subject to tariffs previously announced to specific product names and customs codes. Among them, tariff increases for products such as electric vehicles and electric vehicle lithium batteries will take effect on August 1.

Everbright Securities pointed out that the impact of the US increase in NEV tariffs on China is limited, and attention should be paid to potential risks in the European market. According to the bank, the number of domestic automobile exports to the US is currently limited. In 2023, the volume of new energy passenger vehicles exported by China to the US was -16.2% year-on-year to 12,500 units, accounting for about 0.3% of domestic passenger car exports. As the number of exports from independent brands increases, diversified market layouts should also be adopted to avoid overseas market policy risks. Among them, the European market is still in the anti-investigation window, and independent brands should reduce potential risks through channel preparation, factory construction, and brand acquisitions as soon as possible.

Popular volatile stocks

1. Heplatinum Pharmaceutical-B (02142) was higher throughout the day. By the close, it was up 10.71% to HK$1.55.

It was jointly announced with Harbour BioMed its wholly-owned subsidiary Nona Biotech that they have reached a licensing agreement with AstraZeneca for a preclinical monoclonal antibody project to accelerate the development of targeted cancer therapies. According to the terms of the agreement, Nona Biotech will receive a down payment of $19 million and is entitled to an anticipated recent milestone payment of $10 million, as well as up to $575 million in development, regulatory and commercial milestone payments and tiered royalties based on net sales; in addition, if AstraZeneca exercises the right to choose, Nona Biotech will receive further related payments.

2. Laikai Pharmaceutical-B (02105) bucked the trend and rose 4.21% to HK$7.42 at the close.

Lai Kai Pharmaceutical announced that the Group has obtained approval from the US Food and Drug Administration for LAE 002 (afuresertib, an AKT inhibitor) combined with LAE001 (CYP17A1/CYP11B2 dual inhibitor) for patients with metastatic castration-resistant prostate cancer (mCRPC) after standard treatment.

3. Lingzhan Real Estate Fund (00823) continued to decline. At the close, it fell 3.6% to HK$33.5.

According to the Bank of America Securities Research Report, the rating of Lingzhan Real Estate Fund will be downgraded from “buy” to “neutral”, and the full year results for the end of March will be announced on May 29 (next Wednesday). The target price will be lowered from HK$44 to HK$38. Although the market is known to face pressure from retail sales going to Shenzhen, there is still uncertainty about how long it will take to stabilize the situation.