[ET Net News Agency, 02 April 2026] Overnight, Wall Street continued to speculate on
ceasefire expectations in the Middle East, with US and European markets closing higher.
However, US President Donald Trump delivered a speech at 9 am HK time this morning,
stating that a heavy blow would be dealt to Iran in the next two to three weeks. Market
optimism reversed, and Asia-Pacific stocks generally retreated. The HSI opened down by
dozens of points and continued its downward trend. The HSI closed the midday session at
25016, down 277 points or 1.1%, with main board turnover of nearly HKD 116.2 billion. The
Hang Seng China Enterprises Index stood at 8420, down 84 points or 1%. The Hang Seng Tech
Index was at 4651, down 104 points or 2.2%.

"Ng Lai Yin: Oil and gold prices are equally volatile, but gold has more long-term
support"

The market worries that the war may worsen again. Following Trump's speech, oil prices
surged while gold prices fell sharply. Asia-Pacific stock markets were hit, and Hong Kong
stocks fell below the Bull-Bear line again after just one day, with the HSI dropping over
200 points in the midday session. Ng Lai Yin, a securities strategist at Everbright
Securities, told ET Net News Agency that he was not surprised by the content of Trump's
speech. However, after the market's hopes for peace talks were dampened this morning, a
significant retracement occurred, though the actual situation remains largely the same as
before.
He noted that the situation in Iran is difficult to predict and suggested maintaining a
light-weight approach in deployment, advising against heavy bottom-fishing even if the
market drops. Regarding the Hong Kong long holiday, he suggested that if a portfolio
consists mostly of defensive stocks, there is no need to reduce positions; however, for
volatile sectors or those that have already rebounded, investors could lighten their
holdings before the holiday.
Oil and gold prices reacted immediately after Trump sent pro-war signals. Ng Lai Yin
stated that both oil and gold prices will be directly fluctuated by war news in the short
term. Oil prices, in particular, will spike whenever the war situation worsens and fall
when it eases. Even though oil prices have found support at USD 100 recently, he found it
difficult to conclude that oil prices would definitely rise further. In contrast, he
believes gold is more sustainable for deployment. Although it is volatile in the short
term due to the war atmosphere, gold can act as a substitute or a store of value against
the backdrop of long-term de-dollarisation; therefore, he remains positive on gold in the
long run. However, operationally, as war sentiment rises, gold prices will still face
pressure in the short term. It is not advisable to add to gold positions too early; it
would be more cost-effective to enter when prices fall below USD 4500.

"Auto stocks polarise with Geely and BYD expected to continue outperforming; pharma and
coal stocks likely to sustain counter-trend strength"

As the smoke of war rises ahead of the Hong Kong long holiday, investors are hesitant
about whether to hold or sell. Regarding sector deployment, Ng Lai Yin generally expects
that some sectors showing counter-trend strength may continue their momentum after the
holiday. Car stocks have been relatively strong recently, proving more resilient than the
broader market. He commented that the March delivery data released by most car companies
over the past two days performed well, but this was largely due to the low base in January
and February, and it remains to be seen if the improvement is sustainable. Nevertheless,
individual leading stocks with technical advantages in their models are worth considering;
for instance, BYD (01211) and Geely (00175) are very likely to remain strong. Geely's
rally has been quite aggressive, so he does not recommend chasing high prices. Conversely,
BYD's trend has lagged behind Geely's, but it has formed a solid bottom above USD 100
recently, making it worth entering near the USD 100 level.
The pharmaceutical sector has also been strong recently. Ng Lai Yin believes that
Mainland China pharmaceutical stocks have strong fundamentals, and even with high R&D
expenses, they continue to show corresponding results. He expects pharmaceutical stocks to
outperform car stocks, with companies like WuXi AppTec (02359) and WuXi Bio (02269)
expected to sustain their strength and beat the market.
As for defensive stocks, the recent energy crisis has led the market to scramble for
alternative energy, and coal stocks have been sought after, clearly outperforming the
market lately. Ng Lai Yin agrees that coal stocks are being favoured, and since the sector
possesses valuation with Chinese characteristics elements and offers high dividend yields,
there is value in defensive deployment. In comparison, while power stocks also offer high
dividends, the intensity of price regulation in Mainland China is significant, and the
increased supply from new energy power generation effectively weakens electricity prices.
Therefore, the upside for power stocks is more limited compared to coal stocks.