HKG33 is having a bad month and started the current week with new 2023 lows, as markets were underwhelmed by the latest rate cut from China's central bank. The PBoC lowered only the one-year prime loan rate (LPR) by a modest 10 bps, leaving the five-year LPR unchanged.
This conservative decision highlights the fact that even though authorities are trying to support the faltering economic recovery, they seem unwilling to embrace big stimulus for now, weighing on the region's stock markets. HKG33 is now exposed to 16,977, although we are a bit cautious at this stage for steeper losses that would test 16,127.
The index however rises today, helped by Baidu's strong Q2 2023 results, which send its stock (BIDU.hk) around 4% higher today. HKG33 has the opportunity to take a breath, but a thick falling Ichimoku Cloud can contain any recovery efforts. Under current conditions, we are cautious around ascending prospects and daily closes above the EMA200 that would pause the bearish bias, look like a toll order.
Baidu reported a 15% y/y surge in Revenues to RMB 34.056 billion (USD 4.697 bln), boosted by the "solid performance" of its online advertising business . The tech giant is also at the forefront of the generative Artificial Intelligence (AI) revolution. OpenAI's ChatGPT is not available in China and Baidu unveiled its own AI chatbot (ERNIEBot) back in March . It has been leveraging AI on most of its products since, including the search engine, with its CEO stressing the firm's efforts on the field during the earnings call.
Mr Robin Li Baidu CEO took note of the "hard work" the company has put into generative AI, which is now "beginning to bear fruit", setting the stage for its future success. China's tech companies have faced a hostile regulatory environment in recent years, but this seems to be changing. CEO Robin Li commented that the AI guidelines which took effect his month, are "more pro-innovation than regulation" compared to previous versions. 
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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