Hong Kong Stocks Recover After Selloff

The Hang Seng Index surged 2.4%, or 581 points, to close at 25,143 on Monday, rebounding from Friday's sharp losses making it the best-performing major benchmark in Asia despite lingering geopolitical tensions in the Middle East. Sentiment improved after Beijing stepped up efforts to stabilize its stock market, with two major state-backed funds disclosing fresh equity purchases and regulators preparing to meet key industry participants, boosting confidence in Chinese assets. Bargain hunting following last week's global tech-led selloff and optimism over corporate earnings further supported risk appetite, although investors remained cautious over geopolitical risks and their potential impact on energy prices and global inflation. Among the top gainers were Tencent (3.5%), Semiconductor Manufacturing International Corporation (3.0%), Meituan (3.2%), Xiaomi (3.2%), Kuaishou Technology (4.6%), and Shanghai Iluvatar CoreX (4.9%).

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%).