Mainland China & Hong Kong Market Overview

The A-share market is undergoing a structural rebalancing amid shrinking trading volumes, with capital rotating out of financials and into hard-asset and strategic sectors such as telecommunications, electronic components, and defence.

In Hong Kong, despite broader index pullbacks, southbound investors have continued to buy the dip, with capital rotating into optical communications, resources, and newly listed robotics stocks.

US & Global Markets

US headline inflation held at 3.4% in August, driven by energy prices and persistently high housing costs, complicating the Federal Reserve’s path toward its 2% inflation target. Core inflation eased slightly to 2.9%.

Markets expect monetary policy to remain restrictive for longer. Meanwhile, concerns over central bank independence have resurfaced amid political pressure for lower interest rates, with Kevin Warsh emphasizing the importance of maintaining price stability.

A $6 billion buyback programme failed to calm the bond market, with Treasury yields continuing to rise. This reflects fragile investor confidence amid high fiscal deficits and rising real yields, rather than a renewed increase in inflation expectations.

Although lower oil prices have provided some temporary relief, global bond markets remain highly volatile and vulnerable.