Mainland and HK Market Overview

A-Shares (Inverted N-Shape): The market followed an inverted N-shaped path—rallying early, pulling back sharply, and recovering on low volume. Sentiment heavily favored deeply discounted blue chips as capital rotated out of high-flying first-half AI hardware favorites to lock in gains.

The Hang Seng Index staged a low-open, high-close recovery with the Tech Index displaying higher beta. Turnover hovered at a modest HK$300bn, indicating a liquidity-constrained rebound driven by existing capital. Innovative drugs/biotech surged due to favorable insurance policies and clinical trial prospects, while AI hardware faced profit-taking.

US Economy & Financial Markets

Earnings forecasts are being revised upward at a post-pandemic clip due to AI demand. However, this euphoria masks systemic bubble risks because soaring earnings expectations have mechanically compressed valuation multiples. Meanwhile, the macro backdrop is tightening, shifting from expected rate cuts while a wave of corporate financing narrows the market's safety margin.

Global Markets

South Korea Market Risks: Stagnant investor deposits since March 2026 combined with climbing margin trading balances indicate that the market is running on leverage rather than fresh capital. This has created a "squeezing water from a dry towel" effect, lowering capital efficiency while concentrating risk. The market is in an overextended liquidity phase; without fresh inflows, volatility will intensify.