According to the Huatai Securities Hong Kong Stock Strategy Research Report, interest rate volatility has declined but the point risk has not been lifted, profit expectations have not yet been fixed, and the Hong Kong stock market may rebound steadily in the short term, but the timing and extent remains to be seen. After FOMC was implemented, implied bearish sentiment and negative gamma fluctuations in the options market cooled down, and the market may have improved technically compared to before. However, judging from the trend, the pattern of tightening overseas liquidity and lackluster domestic fundamentals currently faced by Hong Kong stocks has not been reversed. Interest rate volatility was improved after the FOMC boot was implemented, but the US bond interest rate remained around 5%. The subsequent path was determined by oil prices and inflation, and the direction of global central banks tightening monetary policy did not change, limiting the valuation of Hong Kong stocks. In terms of fundamentals, financial and resource products contributed mainly to earnings growth in the second quarter. Profit expectations have fluctuated and leveled off recently, with no significant improvement. In terms of allocation, Huatai Securities believes that balanced allocation needs to sink further from the industry level to the structural level. Dividends are still the bottom position, but the dividend rate advantage should be controlled compared to A-shares convergence and the exposure to industries where it is more cost-effective to increase dividend rates; innovative pharmaceuticals and CXO leaders have been fixed in interest rate hike transactions and can continue to be held, but beta elasticity is limited, and individual stocks need to be selected and set to take profit; essential consumption such as beverages and dairy products has entered the bottom right side of the fundamentals, but there is a lack of catalysis, so be patient.

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