Market Overview - On June 16, despite escalating tensions in the Middle East, the Hong Kong stock market showed resilience, with the Hang Seng Index rising 0.7% to close at 24,060 points[1] - The Hang Seng Tech Index increased by 1.2%, closing at 5,299 points, with a trading volume of HKD 229.2 billion, indicating relative market activity[1] - Net inflow from the Hong Kong Stock Connect was HKD 5.7 billion, reflecting continued interest in the market[1] Sector Performance - Technology stocks generally performed well, with Xiaomi (1810 HK) up 4.2% and Kuaishou (1024 HK) rising over 3%[1] - Real estate and Chinese brokerage stocks remained strong, with major banks like China Construction Bank (939 HK) and Agricultural Bank of China (1288 HK) reaching historical highs[1] - Defensive sectors saw a decline, particularly gold stocks, with Lingbao Gold (3330 HK) dropping 12%[1] Economic Insights - In May, China's economy showed signs of moderate recovery, with retail sales improving month-on-month but continuing to exhibit internal structural disparities[2] - The International Institute of Finance (IIF) reported a USD 5.2 billion inflow into the Chinese market from the beginning of the year until May, although foreign investment in Chinese stocks remains significantly underweight[2] - The Hang Seng Index's valuation is at the 60th percentile of the past seven years, with the AH premium near a three-year low, suggesting limited short-term catalysts for the market[2] Real Estate Trends - New home sales in 30 major cities reached 1.74 million square meters, a year-on-year decline of 3.0%, but an improvement from the previous week's 18.1% drop[3] - The decline in new construction and completion areas was less severe than in April, with decreases of 18.7% and 19.1%, respectively[3] Automotive Sector Developments - Xiaomi announced the upcoming launch of its new car model YU7, alongside several other significant product releases, boosting its stock price by 4.2%[4] Pharmaceutical Sector Updates - CSPC Pharmaceutical (1093 HK) is set to receive USD 1.1 billion in upfront payments from AstraZeneca for multiple drug candidates, with potential milestone payments reaching USD 16.2 billion[5] Investment Strategy - The report suggests a focus on high-dividend defensive sectors like energy and telecommunications, while also considering undervalued tech stocks with growth potential as market conditions stabilize[2][10]