[ET Net News Agency, 16 January 2026] US stocks closed broadly higher on Thursday
(15th), snapping a two-day losing streak. Strong quarterly results from TSMC (US.TSM) and
leading Wall Street banks boosted chip and banking shares, while the latest economic data
showed improved prospects for US manufacturing, lifting market sentiment. In Hong Kong,
after a brief pause yesterday, the HSI again attempted to break the 27,000 mark this
morning. However, the market opened higher only to lose all its early gains, even turning
negative at one point. By midday, the HSI was holding around 26,851, down 71 points. The
Hang Seng China Enterprises Index dropped 64 points, or 0.7 per cent, to 9,229, while the
Hang Seng Tech Index slipped 0.2 per cent to 5,815.

"Nip Chun Pong: 10 basis points of rate cut space expected for 2026"

Yesterday, the People's Bank of China officially announced a 25 basis point cut to
several structural monetary policy tool rates, which the market regards as a "New Year
gift" for economic work in 2026, aimed at further supporting the real economy through a
more accommodative monetary environment. Market expectations for rate cuts in 2026 remain
steady, with most forecasting around 10 basis points of room for reductions over the year.
Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the
PBOC's decision to signal easing at the start of the year is based on three main
considerations. First, for sectors such as food delivery and e-commerce platforms facing
fierce "internal competition" and price wars, the government is expected to introduce
regulatory measures. These will be supported by interest rate adjustments and industrial
guidance to stabilise market pricing structures. Second, to coordinate with the "trade-in"
policy, and continue the policy direction set by the NDRC and Ministry of Finance at the
end of last year, the next wave of national policies will focus on supporting the
consumption of durable goods, especially new energy vehicles. Third, the next stage of
policy will likely shift toward supporting the de-stocking of commercial real estate, with
rate cuts reducing holding and financing costs to help stabilise the property market.
Nip highlighted that the government wants to use monetary and fiscal policy in tandem
starting in 2026 to boost consumption across industries. He believes interest rate
adjustments will not only ease burdens on businesses but also help revive the
long-struggling property sector, providing a positive push for overall economic recovery.

"Watch for risk of early BOJ rate hike"

Despite the PBOC's easing measures, the market reaction was muted, with the HSI still
unable to break above 27,000. Nip pointed out that the HSI has seen "rally and retreat"
patterns for four consecutive sessions since Tuesday (13th). Reviewing the trading between
9 and 13 January, he noted several upward gaps, with key support around 26,600 points. As
long as the HSI holds above this level during pullbacks, there is optimism for another
attempt to break and hold 27,000 this month. Nip suggests watching whether the HSI can
close above 27,200 as a key gauge of market strength going forward.
With the Bank of Japan's policy meeting and an early general election coming up,
uncertainty over Japanese monetary policy is rising, increasing the likelihood of a rate
hike as early as April. Nip warns that this could trigger unwinding of yen carry trades.
In the past, some aggressive investors have financed Hong Kong stock positions with
low-interest yen. If Japan raises rates and borrowing costs rise, investors may be forced
to stop borrowing yen or even sell Hong Kong stocks to cover yen debts, which would put
downward pressure on the HSI. Additionally, any resulting US stock sell-off would weigh on
Hong Kong as well. For now, the key technical level is whether 26,600 support can hold.

"Ali Health's rally on new drug news has faded"

Recently, both Ali Health (00241) and JD Health (06618) surged on positive news about
exclusive global launches of new drugs. Nip believes these catalysts have now been largely
priced in, with profit-taking emerging as share prices retreat from recent highs. Ali
Health, for example, dropped below the HKD 7 mark after hitting nearly HKD 7.3 today,
reflecting heavy resistance at higher levels. Without fresh positive news, the risk of
further correction remains.
For investors considering entry, Nip suggests a wait-and-see approach for Ali Health. He
recommends first watching to see if the share price can hold above HKD 6.50 over the next
couple of sessions. If it fails to hold, there is a risk of a further drop to HKD 6 or
even lower. Only after the stock stabilises should investors consider a medium- to
long-term position.