Hawkish Fed sentiment compounded by a sharp rise in oil prices caused Tencent's shares to plunge nearly 7% post-earnings, leading the tech sector decline and dragging the Hang Seng Index down by 524 points. Concerns over stagflation in Japan are rising; investors looking to short can consider the Southern Two-Times Leveraged Nikkei ETF.

The Federal Reserve kept interest rates unchanged as expected, but due to Powell’s hawkish tone, which cited inflation pressures from the Middle East situation reducing the effectiveness of policies, discussions even touched on raising rates. Market expectations for rate cuts this year have significantly cooled, now forecasting at most one rate cut. Meanwhile, Israel's airstrike on Iran's natural gas fields prompted Iran to warn of retaliatory attacks on key energy facilities in three Middle Eastern countries. Brent crude surged past $110 overnight, causing U.S. stocks to drop sharply. In the Asia-Pacific region, Japanese and South Korean markets followed suit today, with Japanese stocks falling over 3%. The Hang Seng Index opened 475 points lower amid external headwinds and heavy losses in major tech stocks. Although it rebounded briefly to reach a high of 25,737 points, the downward trend resumed shortly after, dropping as much as 576 points to hit a low of 25,449, closing at 25,500 points, down 524 points or 2.02%, marking its largest single-day decline in over two weeks with a turnover of HKD 306.2 billion. The Hang Seng Tech Index closed at 4,996 points, down 112 points or 2.19%, breaking below the 5,000-point level, with a turnover of HKD 88.2 billion. The China Enterprises Index ended at 8,695 points, down 139 points or 1.58%, with a turnover of HKD 119.8 billion. Among blue-chip stocks, 13 rose while 77 fell. Northbound funds flowed strongly against the trend, with net inflows reaching RMB 26.19 billion.

Tencent ($TENCENT (00700.HK)$ ) released its Q4 earnings, reporting a net profit of RMB 58.26 billion, up 13.5% year-on-year, with revenue reaching RMB 194.371 billion, up 13% year-on-year, both exceeding market expectations. However, President Martin Lau stated that this year’s investment in AI products and models will double from last year’s RMB 18 billion and could potentially reduce share repurchases accordingly. This sparked concerns over constrained profit growth momentum, resulting in Tencent’s stock plunging RMB 37.5 or 6.81% post-results to close at RMB 513.

Another heavyweight tech company Alibaba ($BABA-W (09988.HK)$ ) also reported its results after the market close today. Its shares dropped beforehand by RMB 5.7 or 4.14% to close at RMB 132. Together, the two stocks dragged down the Hang Seng Index by more than 232 points. Other tech stocks were also under broad pressure, including Kuaishou ($KUAISHOU-W (01024.HK)$ ) dropped by 3.65 yuan or 6.19%, closing at 55.35 yuan; Baidu ($BIDU-SW (09888.HK)$ ) fell by 4 yuan or 3.28%, closing at 117.8 yuan; JD.com ($JD-SW (09618.HK)$ ) announced no price increase for its cloud services products, but its share price still dropped by 2.1 yuan or 1.86%, closing at 110.7 yuan.

The 'large model duo' MINIMAX ($MINIMAX-W (00100.HK)$ ) and Zhipu ($KNOWLEDGE ATLAS (02513.HK)$ ) also plummeted today, falling by 13.89% and 11.25% respectively, closing at 1066 yuan and 659 yuan; Weibo ($WB-SW (09898.HK)$ ) reported an 8% year-on-year drop in adjusted profits for last year, with its share price plunging by 9.55 yuan or 12.4%, closing at 67.45 yuan;

Weaker interest rate cut expectations drove the US dollar higher, causing gold prices to retreat from their peak. Spot gold briefly fell below 4800 yuan, while precious metals and non-ferrous metal stocks were hit across the board. Zijin Mining ($ZIJIN MINING (02899.HK)$ ) dropped by 2.64 yuan or 7.07%, closing at 34.7 yuan, making it the worst-performing blue-chip stock of the day; its subsidiary, Zijin Gold International ($ZIJIN GOLD INTL (02259.HK)$ ) plunged by 17.7 yuan or 9.3%, closing at 166.9 yuan; China Hongqiao ($CHINAHONGQIAO (01378.HK)$ ) fell by 2.48 yuan or 6.7%, closing at 34.78 yuan; Luoyang Molybdenum ($CMOC (03993.HK)$ ) fell by 1.04 yuan or 5.6%, closing at 17.56 yuan; In the retail gold stocks sector, Laopu Gold ($LAOPU GOLD (06181.HK)$ ) fell by 25 yuan or 5.2%, closing at 638 yuan; Chow Tai Fook ($CHOW TAI FOOK (01929.HK)$ ) fell by 0.4 yuan or 3.42%, closing at 11.3 yuan.

Surging oil prices led to energy stocks outperforming the broader market, with CNOOC ($CNOOC (00883.HK)$ ) rising by 1.28 yuan or 4.52%, closing at 29.58 yuan, making it the best-performing blue chip of the day; PetroChina ($PETROCHINA (00857.HK)$ ) rose by 0.25 yuan or 2.39%, closing at 10.73 yuan; Oil service stocks also saw speculation, with Shandong Molong ($Luzhou Laojiao (000568.SZ)$ ) surging 12.9% or 1.35 yuan, closing at 11.81 yuan; Baipu Oil Services ($PETRO-KING (02178.HK)$ ) rose by 0.035 yuan or 13.5%, closing at 0.295 yuan.

Following an attack on its own gas fields, Iran announced a full-scale strike against U.S.-related oil facilities and declared energy installations in Saudi Arabia, the UAE, and Qatar as legitimate targets, prompting emergency evacuations in the relevant areas. Research from major firms points out that soaring LNG prices will benefit coal, as high gas prices force power plants and industrial users to shift towards coal-fired power and coal-to-gas, directly boosting demand for thermal coal procurement. Mongolian Energy ($MONGOLIA ENERGY (00276.HK)$ ) increased by 0.05 yuan or 8.62%, closing at 0.63 yuan; Yanzhou Coal Australia ($YANCOAL AUS (03668.HK)$ ) rose by 3.374 yuan or 7.89%, closing at 46.12 yuan; Yankuang Energy ($YANKUANG ENERGY (01171.HK)$ ) climbed by 0.68 yuan or 4.26%, closing at 16.63 yuan; Shenhua ($CHINA SHENHUA (01088.HK)$ ) gained 1.32 yuan or 2.78%, closing at 48.78 yuan; China Coal Energy ($CHINA COAL (01898.HK)$ ) went up by 0.34 yuan or 2.41%, closing at 14.46 yuan.

In terms of individual stocks, Xiaomi ($XIAOMI-W (01810.HK)$ )'s new generation SU7 will be officially launched tonight, supporting the stock price to rise against the market trend by 1.18 yuan or 3.36%, closing at 36.32 yuan; AIA ($AIA (01299.HK)$ ) last year’s performance met expectations, but the share price still fell by 1.75 yuan or 2.1% after results, closing at 82.8 yuan; Xuanzhu Biotech ($XUANZHUBIO-B (02575.HK)$ )'s Pyrotinib tablet received approval for first-line indications, causing the stock price to soar by 6.92 yuan or 16.1%, closing at 49.84 yuan; COSCO Shipping Ports ($COSCO SHIP PORT (01199.HK)$ ) earned 1.1% more last year, but dividends were cut by 28%, causing the stock price to fall immediately by 0.7 yuan or 11.1%, closing at 5.59 yuan.

Due to the escalating geopolitical conflicts in the Middle East, the sharp rise in oil prices has placed significant pressure on Japan's economy, which is highly dependent on Middle Eastern oil imports. This has driven up imported inflation and corporate costs, raising market concerns about stagflation. The Nikkei 225 Index closed down approximately 3.38% today at 53,372 points, retreating more than 10% from its late-February peak. Investors who believe that Japanese stocks will continue to adjust downward in the short term may consider the Southern Two-Times Leveraged Nikkei Bear ETF ($CSOP Nikkei 225 Daily (-2x) Inverse Product (07515.HK)$ ), which rose 7.26% today, closing at HKD 25.10. This ETF is a leveraged product that tracks twice the daily decline of the Nikkei 225 Index. Investors should note that leveraged ETFs tend to have much greater price volatility compared to regular ETFs. Long-term holding may lead to compounding losses, and their performance might not fully align with the cumulative index returns over time. These products are suitable for short-term investors who have a clear outlook on the Japanese stock market and can withstand higher volatility risks.

545K Views