Global investors appear to be pricing in the possibility that US President Donald Trump may make concessions on his reciprocal tariff policy, despite continued uncertainties over US trade policy, Daiwa released a research report saying.

On the other hand, since the rapid rebound on 7 April, the SHCI/ HSI have risen to 3,316/ 22,662 (as of 6 May) each, close to the broker's mid-year targets of 3,260/ 22,700. Daiwa's end-2025 target for the HSI was 24,000 (equivalent to a projected PE ratio of 10.5x and an 7.5% increase in corporate earnings).

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The broker believed that, as the HSI reaches its mid-year target, structural trading opportunities in China's stock market will be limited at current index levels, and suggested that investors should focus more on sectoral themes such as TMT and domestic demand sectors.

Daiwa's top picks among Hong Kong equities include TENCENT (00700.HK)  -3.000 (-0.602%)    Short selling $781.71M; Ratio 7.930%   , ANTA SPORTS (02020.HK)  +0.150 (+0.160%)    Short selling $142.35M; Ratio 26.552%   , BYD COMPANY (01211.HK)  -0.400 (-0.104%)    Short selling $602.50M; Ratio 20.830%   , CHINA RES BEER (00291.HK)  -0.200 (-0.733%)    Short selling $62.85M; Ratio 23.835%   , NTES-S (09999.HK)  -2.400 (-1.447%)    Short selling $173.25M; Ratio 20.291%   , SINO BIOPHARM (01177.HK)  -0.040 (-1.031%)    Short selling $59.99M; Ratio 24.939%   and BEKE-W (02423.HK)  -0.600 (-1.193%)    Short selling $51.44M; Ratio 11.398%   , etc..
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-05-08 16:25.)