The Hang Seng Index fell for four consecutive trading sessions last week, declining 881 points or 3.5% for the week. Major bank stock earnings performance and U.S. interest rate direction have become the primary factors influencing market volatility.

JPMorgan Asset Management Global Market Strategist Zhou Huantong expects Hong Kong stocks to experience brief consolidation as they enter August, with major stock earnings performance becoming crucial. She believes that continuous changes in market rate cut expectations may impact equity markets in the short term. However, even if the Federal Reserve delays rate cuts until December, it would demonstrate that the U.S. economy can avoid recession, easing long-term pressures and serving as a favorable factor for risk assets.

Zhou anticipates that after the Federal Reserve's interest rate meeting, earnings of major sector stocks will become the focus, with artificial intelligence (AI)-related technology stocks continuing to be a key highlight. She also expressed optimism about Asia's artificial intelligence industry benefiting from DEEPSEEK's rise, noting that even electric vehicles and low-altitude economy sectors are now incorporating AI concepts.

Mainland China and Hong Kong-related stocks currently have reasonable valuations and policy support, providing growth opportunities for the future. Additionally, she mentioned that more overseas investors are recently paying attention to mainland China and Hong Kong stock markets, noting that changes in mainland consumption patterns favor offshore Chinese concept stocks, with electric vehicles, mobile phones, and mobility-related sectors having the best prospects for growth.

The biotech sector has continued its upward momentum recently. She indicated that as European and American large enterprises show interest in collaborating with mainland biotech companies, the industry is expected to benefit from the theme of mainland brands going international, which is also one of the reasons for being optimistic about the medium to long-term prospects of mainland China and Hong Kong stock markets.