Hong Kong Stocks Hit 11-Month Low

The Hang Seng Index slipped 1.8%, or 446 points, to close at 24,562 on Friday, tracking a broad decline across Asian markets after a selloff in US semiconductor stocks weighed on investor sentiment and reignited concerns over elevated valuations in artificial intelligence-related companies. The weakness followed overnight losses on Wall Street, where technology shares retreated amid growing skepticism over whether substantial AI-related capital spending will generate sufficient returns to justify current market valuations. Sentiment toward Hong Kong equities was also weighed by a widening valuation discount to mainland-listed shares, reflecting persistent liquidity pressures and tighter capital outflow controls in China. Higher oil prices added to inflation concerns, reinforcing expectations that major central banks may remain cautious about easing monetary policy. Notable laggards included Knowledge Atlas (-28.5%), Tencent (-4.6%), SMIC (-10.0%), Xiaomi (-2.3%), and Meituan (-4.1%).

The Hang Seng Index rose 1.3%, or 328 points, to close at 25,009 on Thursday, extending gains as investor sentiment improved following softer-than-expected US inflation data and optimism across global markets. The rally was supported by buying in financial, consumer, and technology stocks, while investors continued to rotate into Hong Kong-listed equities despite weaker-than-expected Chinese economic data. Market sentiment was buoyed after US producer prices unexpectedly fell in June, reinforcing expectations that inflation pressures are easing. However, investors remained cautious as crude oil extended gains after the United States launched fresh strikes on Iran, heightening concerns that escalating Middle East tensions could disrupt global energy supplies and keep inflationary pressures elevated. Notable gainers were Tencent (2.1%), Xiaomi (6.2%), Meituan (4.9%), Kuaishou (5.6%), and Pop Mart International (6.9%).

The Hang Seng Index rose 1.4%, or 340 points, to close at 24,681 on Wednesday, its highest level since June 2026, tracking Wall Street higher after softer-than-expected US inflation data eased concerns over near-term Federal Reserve interest rate hikes. Markets looked beyond renewed Middle East tensions after President Donald Trump threatened further strikes on Iran and reinstated a US blockade in the Strait of Hormuz. Investors shrugs off China's second-quarter GDP data miss, which showed the economy expanded 4.3% year-on-year, slowing from 5.0% in the first quarter and missing market expectations, highlighting persistent domestic economic headwinds. Technology services stocks led the advance, alongside retail trade and producer manufacturing shares, with Tencent (3.9%), Knowledge Atlas (6.7%), Meituan (5.3%), Innovent Biologics (7.8%), and Kuaishou Technology (2.1%) among the top gainers.