CNBC International: After US interest rate cuts and the weakening of the US dollar, the Hang Seng Index is expected to target 29,500 points this year

The Zhitong Finance App learned that Hong Kong stocks had a “good start” in 2026 and surged more than 700 points on the first trading day. Zhang Ho-en, head of personal and commercial banking investment at China CITIC Bank (International), said that the performance of Hong Kong stocks in the fourth quarter of last year fell short of many major markets, only because after accumulating quite a bit of increase, capital took advantage of the end of the year. He is still optimistic about this year's stock market. It is expected that two major factors will boost the market.

He pointed out that since important meetings in the mainland are concentrated in March and April, and the candidate for the next Federal Reserve chairman is still unknown, market conditions will still need to be observed over time. For example, the US interest rate reduction expectations this year are increasing and the US dollar weakening, which is naturally beneficial to Hong Kong stocks. It is expected that the Hang Seng Index's target for this year is 29,500 points.

He also mentioned that the mainland has an extensive artificial intelligence (AI) industry chain, covering many categories. This year is the beginning year of the “15th Five-Year Plan”. The mainland may increase AI-related spending on innovation and development. Competition between China and the US on AI will drive industries such as new energy and autonomous driving, and AI application levels such as cloud computing can also benefit, so the suggestion could absorb leading stocks in the industry.

Furthermore, Zhang Haoen is also optimistic about the prospects of high-yield stocks. Among them, in addition to traditional high-yield stocks such as Chinese telecommunications, domestic banks, domestic insurance, and energy stocks, he believes that essential consumer goods stocks, such as those with interest rates of 3% or more, have room worth playing after falling back in valuation.