[ET Net News Agency, 11 February 2026] US stocks closed mixed on Tuesday, but optimism
persisted across Asian markets this morning. Hong Kong equities and A-shares traded in a
choppy fashion, the HSI opened 63 points higher but quickly surrendered those gains and
briefly slipped into negative territory. Later, strength in auto stocks on positive
industry news helped the HSI recover, closing the morning session up 116 points, or 0.4%,
at 27,299, with main board turnover surpassing HKD 118.6 billion. The Hang Seng China
Enterprises Index finished up 38 points, or 0.4%, at 9,281, while the Hang Seng Tech Index
climbed 59 points, or 1.1%, to 5,510.

"Wan Kong Shing: Pause in southbound flows could spark opportunistic HSI moves with strong
global backdrop"

Global sentiment remains positive, lending support to a steady performance in Hong Kong
shares. However, with the Lunar New Year approaching, southbound funds investors are
winding down activity, keeping the HSI in a holding pattern near recent highs. Wan Kong
Shing, the Chief Investment Officer of iFAST Global Markets, told ET Net News Agency that
pre-holiday sentiment is increasingly evident, with many traders already entering holiday
mode. As the impetus from southbound flows fades, Hong Kong equities inevitably lose some
lustre, net inflows have visibly declined this week, and Wan Kong Shing expects the HSI
will struggle to break above 27,400 ahead of the holiday. However, drawing from past
experience, he noted that during the three sessions when southbound flows pause, the
market sometimes quietly takes advantage to move higher, and if global markets remain
strong, the HSI could attempt a low-volume push towards 28,000.

"Auto stocks benefit from easing trade tensions, but fundamentals remain tied to Mainland
China market"

International news agencies reported that the EU has officially accepted a price pledge
from Volkswagen China over exports of China-made electric vehicles, specifically the CUPRA
Tavascan manufactured in Anhui. This means these vehicles can be exported to the EU above
a minimum import price, exempting them from previously announced high tariffs on Chinese
EVs. The resolution of this specific dispute boosted auto stocks broadly, with blue chips
BYD (01211) and Li Auto (02015) both up over 3% at midday.
Wan Kong Shing observed that, outside of the US, the Western world is beginning to ease
restrictions on Chinese automakers: Canada's recent cooperation with China on EV research
and the EU's fresh compromise are both steps in this direction. He expects more similar
developments in future. However, he also pointed out that while overseas prospects are
improving, Chinese carmakers' market share in Western countries will take time to expand.
Even with easier access in Europe and Canada, the core business of most domestic auto
companies still lies within China. It is unlikely that domestic sales will see a
significant jump over the coming year, so from an investment perspective, the sector does
not currently offer compelling value.
On price outlook, Wan Kong Shing used BYD as an example: the recent rebound is largely a
technical response to prior weakness. Any further moves will depend on key technical
levels, with the psychological threshold at HKD 100 and stronger resistance at HKD 103,
further gains will depend on monthly delivery data. As for new business lines such as
smart driving, Wan Kong Shing remains cautious, noting that demand remains limited and the
newsflow is unlikely to provide sustained support for share prices. Robotics development,
such as that promoted by XPeng (09868), is also still early-stage and seems more
speculative than fundamental at this point, making it hard to drive long-term performance
for sector shares.