Renew Optimism Fuels Hong Kong Equity Market

• HSTECH remains bullish as the Chinese government shows a supporting stance toward the tech industry.

• Eye on today's RBA interest rate decision with the expectation of a first-rate cut from the RBA.

• Oil prices were buoyed by OPEC+ speculation of supply cut extension.

Market Summary

With U.S. markets closed for a public holiday, Chinese equities dominated global market attention. Investor confidence surged after President Xi met with top tech leaders, signaling a more accommodative stance toward the sector. The Hang Seng Index is nearing a five-month high, while the Hang Seng Tech Index has jumped over 25% this year, reaching its highest level since 2023—a sign of renewed optimism toward China's tech industry.

In FX markets, the U.S. dollar remained subdued due to the market holiday but may see a modest recovery when trading resumes. However, its longer-term downtrend remains intact as it lacks a clear catalyst. Meanwhile, the market is focused on today's RBA interest rate decision, with expectations of the first rate cut in years, which could weigh on the Australian dollar. The Pound Sterling has climbed to its strongest level this year, with today's UK jobs data likely to dictate its next move.

In commodities, gold prices remained muted amid the U.S. holiday, while traders monitored peace talks between U.S. and Russian delegates on the Ukraine-Russia conflict. Meanwhile, oil prices edged higher, supported by speculation that OPEC+ may extend supply cuts to counter persistently weak prices.

Current rate hike bets on 19th March Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (98%) VS -25 bps (2%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index remained stable as investors await further clarity on the impact of Trump‘s tariff policies. Federal Reserve Governor Christopher Waller noted that recent economic data supports the Fed’s decision to keep interest rates unchanged, with inflation showing no immediate cause for concern. The Fed will continue monitoring CPI reports for future policy decisions. Geopolitical uncertainties, including the ongoing Russia-Ukraine conflict, have kept market sentiment cautious, and the dollar remained flat.

The Dollar Index is trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 26, suggesting the index might enter oversold territory.

Resistance level: 107.45, 108.40

Support level: 106.55, 105.65

XAU/USD, H4

Gold prices mirrored the dollar‘s uncertainty, as mixed market factors maintain a wait-and-see approach. Bullish drivers include potential de-dollarization by BRICS and uncertainty around Trump’s tariffs, which could reduce the dollars appeal and support gold. However, positive developments in the Russia-Ukraine ceasefire negotiations may shift sentiment toward riskier assets, triggering a selloff in gold. Investors should monitor these developments closely for potential direction.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 59, suggesting the commodity might extend its gains since the RSI stays above the midline.,

Resistance level: 2915.00, 2935.00

Support level: 2880.00, 2855.00

HSTECH (HKTECH)，H4

The Hang Seng Tech Index surged over 18% in February, breaking above its downtrend resistance level and signalling a shift into strong bullish momentum. This rally has been fueled by renewed investor confidence, particularly after Jack Mas return and the high-profile summit between Chinese tech giants and President Xi Jinping, which signalled a more supportive stance from Beijing toward the sector. The policy shift has reinvigorated optimism in Chinese tech stocks, driving robust capital inflows into the sector.

The index has been gaining and has reached its highest level since 2023, suggesting a bullish bias. The RSI remains flowing in the overbought zone, while the MACD continues to edge higher, suggesting that the bullish momentum remains strong with the pair.

Resistance level: 6155.00, 6722.00

Support level: 5160.00, 4700.00