[ET Net News Agency, 27 January 2026] Buoyed by anticipation of robust earnings from
major US stocks and a positive global backdrop, Hong Kong equities extended their winning
streak to a fourth session, surging above the 27,000 mark at the open. The Hang Seng
Index's morning rally was further supported by strong market response to Alibaba's (09988)
new AI model, with gains widening to 290 points or 1.1% by midday, closing at 27,055, a
near two-week high and a clear break from the 10-day moving average (around 26,561). Main
board turnover was close to HKD 134.8 billion, though net inflows from Stock Connect
remained modest. The Hang Seng China Enterprises Index rose 78 points or 0.9% to 9,226,
while the Hang Seng Tech Index edged up 11 points or 0.2% to 5,737.

"Ryan Chan: Hong Kong stocks benefiting from global capital rotation"

With the Federal Reserve set to decide on interest rates this week, US equities rallied
overnight and Hong Kong stocks broke out of consolidation this morning, with the HSI
surging more than 400 points after reclaiming 27,000 and successfully holding above that
level at midday. Eddie Chan, an executive director of Eddid Financial, told ET Net News
Agency that Hong Kong stocks are showing clear signs of catching up with gains in external
markets, and with capital flows in their favour, a breakout above the previous resistance
at 27,381 may happen soon. However, he cautioned that breaking out and holding above
resistance are two different things, and the ability to sustain gains will be key for the
broader market going forward.
Chan noted that, fundamentally and in terms of news flow, there is still a lack of
strong drivers; today's rally was fuelled primarily by capital inflows, which alone may
not be enough to sustain the market higher. He also observed that downside risk for the
market currently appears limited, especially as today's inflows were most pronounced in
Tencent (00700), a shift from previous sessions where Alibaba (09988) dominated. This
suggests market rotation is taking place ahead of key news events, and he expects the HSI
to find support at 26,500 without needing to retest the major 26,000 level.
Ahead of the Fed's rate decision, both US and Hong Kong stocks are in rally mode, but
Chan believes Hong Kong equities are less affected by rate expectations in the short term,
as most anticipate the Fed will hold steady. Recently, global capital flows have become
the market's main focus. Chan explained that increased volatility in US dollar assets and
rising uncertainties have prompted asset reallocations away from the dollar; even gold is
attracting high-level buying at record prices, and Hong Kong equities have benefited from
this wave of capital rotation. Nevertheless, he noted that while US stocks are affected by
capital outflows, top US tech names remain irreplaceable in global portfolios, ensuring
some funds stay in US equities.

"Hopes for Apple's China sales and AI partnerships with Alibaba and Baidu"

Apple is set to announce its fiscal Q1 results later this week, with the market
expecting record-breaking numbers driven by strong iPhone 17 sales and the usual Christmas
and New Year holiday boost. Revenue is forecast to reach between USD 138.2 billion and
138.5 billion, marking year-on-year growth of around 10-12%. Chan agrees Apple is likely
to post record quarterly sales, but notes that iPhone 17's performance upgrades are not
dramatic, and much of the anticipated growth is due to a global replacement cycle. As
such, the market will pay closer attention to other revenue streams, such as wearables and
services, as well as profit margins. With an ongoing global DRAM chip shortage, Chan
acknowledges Apple will also be affected, but expects its strong pricing power to offset
higher costs.
Chan further highlighted that iPhone 17's strong sales are especially evident in China,
particularly for high-end models like the Pro and Pro Max, which are outperforming other
regions. He expects the Chinese market will be a bright spot this quarter, with a strong
chance of upside surprises. Looking ahead, there are reports that Alibaba and Baidu
(09888) will become Apple's AI partners in Greater China. Chan believes that with the
continued innovation from Qianwen and Wenxin, there is a high chance that this year's
iPhone 18 will feature Alibaba and Baidu's AI technology, creating further excitement for
Apple as well as both Chinese tech giants.
As for Apple's share price, Chan expects another strong quarterly performance but does
not consider Apple his top US tech pick, given its limited proprietary AI development and
its downstream position in the AI supply chain. The upside is likely to be smaller than
for AI hardware suppliers and developers, making Apple more a beneficiary of capital flows
and potential share buybacks. Consequently, he is even less optimistic about Hong
Kong-listed Apple supply chain stocks, given the low barrier to direct investment in US
shares. Chan expects these "Apple concept" stocks to stabilise, but sees meaningful upside
as unlikely for now.