Haitong Int'l recently released a Hong Kong strategy report forecasting that both A-shares and Hong Kong stocks will enter a period of volatility and bottoming, with attention on when the China-US interest rate spread will begin to narrow.

In the broker's estimate, market volatility will escalate around the time of Donald Trump's inauguration as US President, yet China will also adopt more proactive policies in response, such as cutting RRR and interest rates. The broker anticipated the market to stabilize before the Lunar New Year, which will provide the best opportunity for allocation in 1H25.

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In terms of sectors, it is expected that bank stocks may perform better during the market's bottoming phase this week to shore up the index. Once the market stabilizes, investors are advised to focus on technology as the main theme for 1H25, particularly AI infrastructure and applications (robots, glasses) that performed robustly in this week's rebound.