[ET Net News Agency, 21 October 2025] Easing concerns over the China-US trade war, the
US government shutdown, and credit issues among regional banks saw US stocks extend gains
on Monday (20th). Hong Kong stocks followed the positive lead, opening higher and
continuing to climb, with tech and Mainland China insurance stocks leading gains. The Hang
Seng Index rose to a high of 26,367, testing the 20-day moving average, and closed the
morning session at 26,286, up 427 points or 1.7 percent. Main board turnover was nearly
HKD 15.07 billion. The Hang Seng China Enterprises Index was at 9,397, up 165 points or
1.8 percent. The Hang Seng Tech Index was at 6,087, up 154 points or 2.6 percent.

"Lee Wai Kit: further negotiation cards likely before China-US meeting; reducing exposure
advisable amid potential volatility"

The US federal government is expected to reopen soon, and US stocks performed well
overnight. On the back of capital inflows, the renminbi strengthened notably in early
trading, with the RMB fixing at 7.0930 per US dollar, up 43 pips from the previous session
and at a one-year high. The HSI opened 301 points higher and extended gains, at one point
rising more than 500 points. Lee Wai Kit, a financial commentator of TF International,
told ET Net News Agency that the HSI has already filled last week's gap and recovered to
the 20-day moving average level. However, a further upward breakthrough will require more
positive developments from China-US talks, so the short-term rally may be capped. He
suggested that cautious investors might consider reducing positions at this stage.
Lee analysed that following a positive call between Vice Premier He Lifeng and US
Treasury Secretary Bessent, the groundwork is being laid for a leaders' summit in two
weeks, with a high probability of the meeting taking place and some form of agreement
being reached. However, with some time before the official meeting, both sides may
continue to play their negotiation cards, which could weigh on the market. He expects
increased volatility ahead of the summit. If investors' holdings are not directly linked
to China-US themes, they may ride out the swings, but a sharp correction would still have
a broad impact. Therefore, he recommends focusing in the short term on sectors less
exposed to China-US negotiation risk, such as Chinese financials.
If the HSI pulls back again, Lee sees initial support at the 50-day moving average
around 25,900, but as this level has only just been recovered, it may not be solid support
yet. The more significant support remains at the 100-day moving average, which held last
week. The degree of any correction will also depend on the strength of US President
Trump's negotiation tactics.

"iPhone 17 sales boost Apple concept stocks, but lack of innovation limits long-term
upside"

Overnight, Apple (US:AAPL) saw its share price surge over 4 percent to a record high
after a research report gave an upbeat outlook for iPhone 17 sales. On Tmall's "Double 11"
shopping festival, iPhone 17's first-hour sales surpassed last year's entire first-day
total, which helped all Apple concept stocks in Hong Kong rally this morning. Lee Wai Kit
said that the iPhone 17 frenzy means Apple concept stocks still have room for short-term
speculation, particularly as the new model is priced more competitively than iPhone 16,
fuelling a wave of upgrades. He expects iPhone 17 sales momentum to remain strong in the
near term.
However, he also pointed out that the market is currently more interested in innovative
themes such as AI or robotics. Most Apple supply chain stocks remain highly reliant on
Apple orders and lack business diversification, making it difficult for them to attract
sustained market attention. For names like Sunny Optical (02382) and AAC Technologies
(02018), trading is likely to remain short-term and volatility-driven. Although Sunny
Optical has non-mobile businesses such as automotive cameras, overall innovation news is
limited. In the future, there may be some integration with smart driving themes, but this
will take time to materialise.