[ET Net News Agency, 06 January 2026] Global equities kicked off the new year on a
positive note, with energy and traditional sectors leading gains overnight. The Dow Jones
surged 594 points, or 1.23 per cent, to close at 48,977, while other major indices also
advanced. Although the Hang Seng Index saw modest profit-taking yesterday, a strong wave
of southbound inflows provided fresh impetus this morning. After opening 155 points
higher, Hong Kong stocks extended their advance, with sectors such as insurance, property,
metals, and local real estate all moving higher. The Hang Seng Index at one point soared
over 500 points to reach 26,858, its highest level since 14 November last year, before
ending the morning session up 468 points or 1.8 per cent at 26,815. Main board turnover
approached HKD 162.7 billion, though net southbound inflows stood at HKD 1.86 billion.
The Hang Seng China Enterprises Index rose 147 points or 1.6 per cent to 9,296, while
the Hang Seng Tech Index gained 126 points or 2.2 per cent to 5,868.

"Wan Kong Shing: Focus on AI themes this quarter, outlook for Chinese oil majors turns
softer"

Following the new year, Hong Kong stocks have clearly reversed course, with southbound
capital returning in force as HKD 18.7 billion flowed into the market yesterday,
confirming that last Friday's 700-point surge was more than a flash in the pan. This
morning, aggressive buying continued, pushing the HSI up by nearly 500 points to challenge
resistance at 26,800 ahead of 27,000. Wan Kong Shing, the Chief Investment Officer of
iFAST Global Markets, told ET Net News Agency that capital rotation is evident in the new
year. Although 26,800 was initially seen as a resistance level, the market reached it in
one session, so the new resistance target for January is 27,000. With strong market
momentum and three months of consolidation behind, Wan believes an upside breakout above
the October high at 27,381 is more likely than a retreat below the 26,000 support.
Wan expects the Hong Kong market to remain focused on AI themes in the first quarter,
with technology and metals stocks likely to outperform. In contrast, he sees limited
upside for energy names, particularly oil majors, given the prospect of US control over
Venezuelan oil production, which could disrupt supply chains established by Chinese oil
companies and weigh on their outlook.
Venezuela is China's largest debtor in Latin America, accounting for 45 per cent of the
region's allocated funds. Following the political shift in Venezuela, reports suggest the
China Banking and Insurance Regulatory Commission has asked policy banks and major lenders
to report their exposure to Venezuelan loans in order to assess potential risks. A-shares
of Chinese banks and some non-blue-chip Mainland China lenders have come under pressure.
Wan believes China has long managed its exposure in Venezuela and, while some risks
remain, prudent controls mean the impact on Mainland China banks should be limited. Since
2015, China has refused to extend new loans to Venezuela, so he expects current pressure
on bank stocks is driven more by market concerns over loan recovery than by fundamental
threats. As such, the sell-off in bank shares is unlikely to persist.

"Sunny Optical's lidar development lags, little excitement for spin-off"

Nvidia announced the open-sourcing of its first inference VLA model, Alpamayo 1,
designed to handle complex driving scenarios using human-like reasoning and assist
autonomous vehicles in real-world situations. CEO Jensen Huang said the first vehicles
equipped with Alpamayo 1 will hit US roads in the first quarter. The news boosted smart
driving concept stocks, and Sunny Optical (02382), which has been developing lidar
technology, also signalled it is considering spinning off its lidar business for a Hong
Kong listing. Still, the share price rose initially but then retreated.
Wan noted that despite years of investment in lidar, Sunny Optical has yet to deliver
meaningful revenue or profit from the segment. While the company is now looking to spin
off the business amid the technology IPO boom, the muted share price reaction shows that
market expectations are low, unlike Baidu's (09888) Kunlun chip unit, which is already
well-known to investors. Even with a spin-off, Sunny Optical is unlikely to replicate
Baidu's rally. Wan expects the stock to remain range-bound in the near term, with
resistance at HKD 70 after breaching the 50-day moving average this morning, but with
momentum lacking, it is likely to fluctuate between HKD 62.5 and HKD 72.
Although both China and the US are actively advancing autonomous driving, Wan remains
cautious on the sector's overall prospects. He explained that while Baidu and Alphabet
already have robotaxis operating, neither has delivered impressive financial results, and
the sector's revenue and profit potential will take time to materialise. Currently,
Mainland China is conducting L3-level smart driving road tests, but Wan observed that more
time is needed to validate safety before widespread adoption. While smart driving features
can enhance new cars, significant price increases could deter consumers, as autonomous
driving is not yet a key purchasing factor. As a result, Wan expects the industry to
maintain a steady pace of development without rapid growth in the near term.