The Hang Seng Index opened 0.47% lower, while the Hang Seng Tech Index fell by 0.2%. The semiconductor sector showed strength, with INNOSCIENCE (02577) rising over 5%. Huahong Hongli and Montage Technology gained more than 4%, while GigaDevice and SMIC (00981) advanced over 3%.

Market Outlook and Analysis

Regarding the near-term outlook for Hong Kong stocks, one analysis suggests that while short-term market sentiment has improved, it is not advisable to excessively increase risk exposure. Investors may moderately focus on growth sectors with strong earnings certainty and high elasticity. If the Federal Reserve maintains a neutral-to-hawkish stance, the market may return to volatility after a period of recovery. Conversely, if the Fed releases unexpectedly dovish signals, sectors that have experienced significant pullbacks and possess advantages in dividend yield and valuation may see a valuation rebound.

Another perspective highlights a significant increase in catalysts compared to the previous period. Beyond geopolitical developments, this week's Federal Reserve meeting is seen as a crucial catalyst. It is suggested that as long as new Fed Chair Waller's statements remain relatively neutral (avoiding strongly hawkish signals), it could effectively support global risk assets, benefiting a rebound in Hong Kong stocks and a return of foreign capital.

Structural Shift in Market Drivers

A separate research report points out that a primary upward wave for Hong Kong stocks is being established. The market's performance is transitioning from the earlier phase of valuation and sentiment repair to a new stage jointly driven by earnings verification and improving risk appetite. From a broader cycle perspective, Hong Kong stocks have moved past the low-valuation repair stage seen since last year and have formally entered the mid-to-late phase of a bull market. This stage is not expected to be a broad-based index rally but rather a structural uptrend driven by earnings, sector momentum, and industrial realization. Much of the liquidity and valuation repair has already been priced in; subsequently, the core variable determining excess returns will shift towards earnings verification. Structural improvements have already appeared in the first-quarter reports of leading internet companies, and market expectations for an earnings recovery in Hong Kong stocks are being rebuilt.