Taiwan Strait | Financial market "surface recovery" dark war is brewing, Hong Kong stocks suffer the most

The U.S. House of Representatives Speaker Nancy Pelosi's military plane landed at Taipei's Songshan Airport, the third-largest figure in the U.S. government, causing a stir in Asian financial markets last week.

Fortunately, the Sino-US military conflict and the "hot war", which investors are most worried about, did not occur, and the selling pressure on the Asia-Pacific market appeared to be "flash" on the surface, and the Asian stock exchange market gradually regained lost ground.

However, the PLA launched a military exercise in six areas around Taiwan, the largest military exercise ever conducted in the Taiwan Strait, indicating that the "dark war" between the Taiwan Strait will continue for some time to come.

In the past few years, whenever there are changes in the geopolitics of major powers, such as the trade war between China and the United States in 2018, Russia's invasion of Ukraine at the beginning of this year, and Western countries imposing economic and trade sanctions on Russia, as an international financial center and the most unrestricted capital in and out of the Asia-Pacific region. City, the Hong Kong stock market has been under pressure for a long time.

Looking back at the performance of the HSI this year, at the beginning of the year, the HSI had a "glorious period" before the Lunar New Year, and gradually climbed up to the highest level of the year, with the HSI above 25,000 points.

However, when Russia officially dispatched troops to Ukraine at the end of February, the investment sentiment deteriorated across the board, and Hong Kong stocks fell on the verge of falling.

Furthermore, before Pelosi's visit to Taiwan last week, the decline of the HSI in Hong Kong stocks was more severe than that in Taiwan and mainland China, the protagonists of the event.

Therefore, although the Hang Seng Index temporarily stopped falling, it can be seen from the recent turnover that the main board turnover for the whole day was less than 100 billion yuan.

Referring to the data of the Hong Kong Stock Exchange, the average daily securities market turnover in July was only 108.5 billion, down another 28% on a monthly basis, and a sharp drop of more than 40% year-on-year, which shows that people are deserted and investors are not confident.

Goldman Sachs believes that although Pelosi's trip has brought cross-strait relations into focus, since Russia invaded Ukraine in late February this year, the market has worried that the risk of Russian sanctions may spread to China. In the past few months, global investors have been concerned about geopolitical risks. will be transferred to China.

Geopolitical tensions and rising uncertainty will have three negative impacts on stocks...  

For details, please read "Hong Kong 01" Electronic Weekly Issue No. 329 (August 8, 2022) "