Bank of East Asia: Hang Seng Index's target is 29,000 points this year, with a pessimistic view of possibly reaching 23,000 points

**Opinion View Hong Kong Report: **On April 8, East Asia Bank’s 2026 Q2 investment outlook said that looking ahead to 2026, with positive factors such as easing uncertainty in global trade policies, continued ample market liquidity, and public investment staying high, the economic recovery momentum is expected to continue, and full-year growth could reach 2.8%.

Benefiting from falling interest rates, the continued economic recovery, and the homebuying demand further boosted by talents coming to Hong Kong, residential property prices in 2026 are expected to achieve high single-digit growth.

Under the baseline scenario assumptions (the Middle East conflict may ease within the next 4 to 6 weeks, and Brent crude oil prices fall to below $90 per barrel), the bank lowered its 2026 fiscal year Hang Seng Index earnings forecast from HK$2,350 (YoY+13%) to HK$2,300 (YoY+10%); and reduced its 2026 fiscal year Hang Seng Index target from 30,800 points to 29,000 points, with near-term volatility regarded as a chance to accumulate.

Stocks/sectors or themes it favors: AI cloud platforms, advanced semiconductors, humanoid robots, copper and gold mines, photovoltaic and energy storage equipment, Mainland China’s new consumption, Mainland insurance, Hong Kong real estate, and Hong Kong transportation.

In the bearish scenario assumptions (the Middle East conflict worsens/continues into the third quarter, and Brent crude oil rises to $120 per barrel and stays at that level into the third quarter), the bank lowered its 2026 fiscal year Hang Seng Index earnings forecast from HK$2,350 (YoY+13%) to HK$2,200 (YoY+5%); reduced the full-year Hang Seng Index target from 30,800 points to 24,200 points, and the second quarter is expected to face an adjustment of more than 10% (i.e., a drop to 23,000 points); and near-term defensive stocks/sectors or themes: upstream energy and oil-and-gas equipment, tanker shipping, coal, new energy power and energy storage, new energy vehicles, Mainland banks, and local utilities.

East Asia said that if Brent crude oil rises to above $120 per barrel and remains at that level through Q3, the Hang Seng Index is expected to underperform the A-share index, with a downside adjustment of more than 8–10%. This is mainly because intensified U.S. stagflation pressure causes rate-cut expectations to fall short; together with funds re-investing in U.S. dollar safe-haven assets, which puts pressure on the RMB exchange rate; and also because profits of domestic industrial and consumer enterprises are harmed; while an increase in the risk premium leads to lower valuations for growth stocks.

Disclaimer: The content and data in this article are compiled by Opinion View based on publicly available information and do not constitute investment advice. Please verify before use.

(Editor: Zhang Xiaobo ）

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